<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-K

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  For the fiscal year ended December 31, 1999

                                      OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                    For the transition period from ________ to __________


                         Commission file number 0-19139

                           CNL INCOME FUND VIII, LTD.
             (Exact name of registrant as specified in its charter)

                 Florida                                 59-2963338
     (State or other jurisdiction of             (I.R.S. Employer Identification
      incorporation or organization)              No.)


                            450 South Orange Avenue
                          Orlando, Florida 32801-3336
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 540-2000

          Securities registered pursuant to Section 12 (b) of the Act:

         Title of each class:            Name of exchange on which registered:
                 None                              Not Applicable

          Securities registered pursuant to section 12(g) of the Act:

              Units of limited partnership interest ($1 per Unit)
                                (Title of class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes   X   No ___
                                        ----

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]

     Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant registered an offering of 35,000,000 units of limited
partnership interest (the "Units") on Form S-11 under the Securities Act of
1933, as amended.  Since no established market for such Units exists, there is
no market for such Units.  Each Unit was originally sold at $1 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                   None
<PAGE>

                                    PART I

Item 1.  Business

     CNL Income Fund VIII, Ltd. (the "Registrant" or the "Partnership") is a
limited partnership which was organized pursuant to the laws of the State of
Florida on August 18, 1989. The General Partners of the Partnership are Robert
A. Bourne, James M. Seneff, Jr. and CNL Realty Corporation, a Florida
corporation (the "General Partners"). Beginning on August 2, 1990, the
Partnership offered for sale up to $35,000,000 of limited partnership interests
(the "Units") (35,000,000 Units at $1 per Unit) pursuant to a registration
statement on Form S-11 under the Securities Act of 1933, as amended, effective
January 30, 1990. The offering terminated on March 7, 1991, at which date the
maximum offering proceeds of $35,000,000 had been received from investors who
were admitted to the Partnership as limited partners (the "Limited Partners").

     The Partnership was organized to acquire both newly constructed and
existing restaurant properties, as well as properties upon which restaurants
were to be constructed (the "Properties"), which are leased primarily to
operators of national and regional fast-food and family-style restaurant chains
(the "Restaurant Chains"). Net proceeds to the Partnership from its offering of
Units, after deduction of organizational and offering expenses, totaled
$30,975,000 and were used to acquire 38 Properties, including interests in eight
Properties owned by joint ventures in which the Partnership is a co-venturer,
and to establish a working capital reserve for Partnership purposes. During the
year ended December 31, 1995, the Partnership sold its Property in Ocoee,
Florida and reinvested the majority of the net sales proceeds in a Property in
North Fort Myers, Florida. Also, during the year ended December 31, 1995, the
Partnership sold two Properties in Jacksonville, Florida. During the year ended
December 31, 1996, the Partnership reinvested the remaining net sales proceeds
from the 1995 sale of the Property in Ocoee, Florida, in Middleburg Joint
Venture, in which the Partnership is a co-venturer to purchase and hold one
property in Middleburg Heights, Ohio. Also, during the year ended December 31,
1996, the Partnership sold its Property in Orlando, Florida. During 1998, the
Partnership received a settlement from the Florida Department of Transportation
for a right of way taking relating to a parcel of land on its Property in
Brooksville, Florida. In addition, during the year ended December 31, 1999, the
Partnership received a prepaid principal payment from the borrower relating to
one of the promissory notes the Partnership had previously accepted. During
1999, the Partnership reinvested the prepaid principal, along with the
settlement received in the right of way taking, in Bossier Joint Venture, in
which the Partnership is a co-venturer to purchase and hold one Property in
Bossier City, Louisiana. As a result of the above transactions, as of December
31, 1999, the Partnership owned 37 Properties. The 37 Properties included
interests in ten Properties owned by joint ventures in which the Partnership is
a co-venturer. The Properties are generally leased on a triple-net basis with
the lessees responsible for all repairs and maintenance, property taxes,
insurance and utilities.

     The Partnership will hold its Properties until the General Partners
determine that the sale or other disposition of the Properties is advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation, net cash flow and federal income tax considerations.  Certain
lessees also have been granted options to purchase Properties, generally at the
Property's then fair market value after a specified portion of the lease term
has elapsed.  The Partnership has no obligation to sell all or any portion of a
Property at any particular time, except as may be required under property
purchase options granted to certain lessees.

     On March 11, 1999, the Partnership entered into an Agreement and Plan of
Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership would be merged with and into a subsidiary of APF (the "Termination
of Merger"). APF is a real estate investment trust whose primary business is the
ownership of restaurant properties leased on a long-term, "triple-net" basis to
operators of national and regional restaurant chains. Under the Agreement and
Plan of Merger, APF was to issue shares of its common stock as consideration for
the Merger. On March 1, 2000, the General Partners and APF announced that they
had mutually agreed to terminate the Agreement and Plan of Merger. The agreement
to terminate the Agreement and Plan of Merger was based, in large part, on the
General Partners' concern that, in light of market conditions relating to
publicly traded real estate investment trusts, the value of the transaction had
diminished. As a result of such diminishment, the General Partners ability to
unequivocally recommend voting for the transaction, in the exercise of their
fiduciary duties, had become questionable.

Leases

                                       1
<PAGE>

     Although there are variations in the specific terms of the leases, the
following is a summarized description of the general structure of the
Partnership's leases. The leases of the Properties owned by the Partnership and
the joint ventures in which the Partnership is a co-venturer provide for initial
terms, ranging from 14 to 25 years (the average being 18 years), and expire
between 2005 and 2019. All leases are generally on a triple-net basis, with the
lessees responsible for all repairs and maintenance, property taxes, insurance
and utilities. The leases of the Properties provide for minimum base annual
rental payments (payable in monthly installments) ranging from approximately
$41,300 to $213,800. All of the leases provide for percentage rent, based on
sales in excess of a specified amount. In addition, a majority of the leases
provide that, commencing in specified lease years (ranging from the third to the
sixth lease year), the annual base rent required under the terms of the lease
will increase.

     Generally, the leases of the Properties provide for two to four five-year
renewal options subject to the same terms and conditions as the initial lease.
Lessees of 30 of the Partnership's 37 Properties also have been granted options
to purchase Properties at the Property's then fair market value after a
specified portion of the lease term has elapsed.  Fair market value will be
determined through an appraisal by an independent appraisal firm.  Under the
terms of certain leases, the option purchase price may equal the Partnership's
original cost to purchase the Property (including acquisition costs), plus a
specified percentage from the date of the lease or a specified percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised.

     The leases also generally provide that, in the event the Partnership wishes
to sell the Property subject to that lease, the Partnership first must offer the
lessee the right to purchase the Property on the same terms and conditions, and
for the same price, as any offer which the Partnership has received for the sale
of the Property.

     During 1994, the lease relating to the Property in Tiffin, Ohio, was
amended to provide for the payment of reduced annual base rent with no scheduled
rent increases. However, the lease amendment provided for a lower percentage
rent breakpoint, as compared to the original lease agreement, a change that was
designed to result in higher percentage rent payments at any time that
percentage rent became payable. In accordance with a provision in the amendment,
as a result of the tenant assigning the lease to a new tenant during 1998, the
rents under the assigned lease reverted back to those required under the
original lease agreement.

     During 1998, the leases relating to the Burger King Properties in New York
City and Syracuse, New York, New Philadelphia and Mansfield, Ohio; and
Asheville, North Carolina, were amended to provide for rent reductions from
August 1998 through the end of the lease terms.

         In November 1999, the Partnership entered into a joint venture, Bossier
City Joint Venture, with an affiliate of the General Partners to purchase and
hold one Property indirectly.  The lease terms for this Property are
substantially the same as the Partnership's other leases as described above.


Major Tenants

     During 1999, three lessees of the Partnership and its consolidated joint
venture, Golden Corral Corporation, Carrols Corporation and Restaurant
Management Services, Inc., each contributed more than ten percent of the
Partnership's total rental income (including rental income from the
Partnership's consolidated joint venture and the Partnership's share of rental
income from nine Properties owned by unconsolidated joint ventures).  As of
December 31, 1999, Golden Corral Corporation was the lessee under leases
relating to four restaurants, Carrols Corporation was the lessee under leases
relating to five restaurants and Restaurant Management Services, Inc. was the
lessee under leases relating to five restaurants.  It is anticipated that, based
on the minimum rental payments required by the leases, these three lessees each
will continue to contribute more than ten percent of the Partnership's total
rental income in 2000.  In addition, three Restaurant Chains, Golden Corral
Family Steakhouse Restaurants, Burger King and Shoney's, each accounted for more
than ten percent of the Partnership's total rental income in 1999 (including
rental income from

                                       2
<PAGE>

the Partnership's consolidated joint venture and the Partnership's share of
rental income from nine Properties owned by unconsolidated joint ventures).  In
2000, it is anticipated that these three Restaurant Chains each will continue to
account for more than ten percent of the Partnership's total rental income to
which the Partnership is entitled under the terms of the leases.  Any failure of
these lessees or Restaurant Chains could materially affect the Partnership's
income if the Partnership is not able to re-lease the Properties in a timely
manner.  No single tenant or group of affiliated tenants lease Properties with
an aggregate carrying value in excess of 20 percent of the total assets of the
Partnership.

Joint Venture Arrangements

     The Partnership has entered into a joint venture arrangement, Woodway Joint
Venture, with an unaffiliated entity to purchase and hold one Property.  In
addition, the Partnership has entered into four separate joint venture
arrangements: Asheville Joint Venture with CNL Income Fund VI, Ltd., an
affiliate of the General Partners, to purchase and hold one Property; CNL
Restaurant Investments II with CNL Income Fund VII, Ltd. and CNL Income Fund IX,
Ltd., affiliates of the General Partners, to purchase and hold six Properties;
Middleburg Joint Venture with CNL Income Fund XII, Ltd., an affiliate of the
General Partners, to purchase and hold one Property and Bossier City Joint
Venture with CNL Income Fund XII, Ltd. and CNL Income Fund XIV, Ltd., affiliates
of the General Partners, to purchase and hold one Property.  Each of the
affiliates is a limited partnership organized pursuant to the laws of the State
of Florida.

     The joint venture arrangements provide for the Partnership and its joint
venture partners to share in all costs and benefits associated with the joint
ventures in accordance with their respective percentage interests in the joint
ventures.  The Partnership has an 87.68% interest in Woodway Joint Venture, an
85.54% interest in Asheville Joint Venture, a 36.8% interest in CNL Restaurant
Investments II, a 12.46% interest in Middleburg Joint Venture and a 34% interest
in Bossier City Joint Venture.  The Partnership and its joint venture partners
are also jointly and severally liable for all debts, obligations and other
liabilities of the joint ventures.

     Woodway Joint Venture, Asheville Joint Venture, Middleburg Joint Venture
and Bossier City Joint Venture each have an initial term of 20 years and, after
the expiration of the initial term, continue in existence from year to year
unless terminated at the option of either joint venturer or by an event of
dissolution.  Events of dissolution include the bankruptcy, insolvency or
termination of any joint venturer, sale of the Property owned by the joint
venture and mutual agreement of the Partnership and each joint venture partner
to dissolve the joint venture.  CNL Restaurant Investments II's joint venture
agreement does not provide for a fixed term, but continues in existence until
terminated by any of the joint venturers.

     The Partnership has management control of Woodway Joint Venture and shares
management control equally with affiliates of the General Partners for Asheville
Joint Venture, CNL Restaurant Investments II, Middleburg Joint Venture and
Bossier City Joint Venture.  The joint venture agreements restrict each
venturer's ability to sell, transfer or assign its joint venture interest
without first offering it for sale to its joint venture partner, either upon
such terms and conditions as to which the venturers may agree or, in the event
the venturers cannot agree, on the same terms and conditions as any offer from a
third party to purchase such joint venture interest.

     Net cash flow from operations of Woodway Joint Venture, Asheville Joint
Venture, CNL Restaurant Investments II, Middleburg Joint Venture and Bossier
City Joint Venture is distributed 87.68%, 85.54%, 36.8%, 12.46% and 34%,
respectively, to the Partnership and the balance is distributed to each of the
other joint venture partners in accordance with their respective percentage
interest in the joint venture.  Any liquidation proceeds, after paying joint
venture debts and liabilities and funding reserves for contingent liabilities,
will be distributed first to the joint venture partners with positive capital
account balances in proportion to such balances until such balances equal zero,
and thereafter in proportion to each joint venture partner's percentage interest
in the joint venture.

     The use of joint venture arrangements allows the Partnership to fully
invest its available funds at times at which it would not have sufficient funds
to purchase an additional property, or at times when a suitable opportunity to
purchase an additional property is not available.  The use of joint venture
arrangements also provides the Partnership with increased diversification of its
portfolio among a greater number of properties.

                                       3
<PAGE>

Certain Management Services

     CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain services relating to management of the Partnership and its Properties
pursuant to a management agreement with the Partnership.  Under this agreement,
CNL Fund Advisors, Inc. is responsible for collecting rental payments,
inspecting the Properties and the tenants' books and records, assisting the
Partnership in responding to tenant inquiries and notices and providing
information to the Partnership about the status of the leases and the
Properties.  CNL Fund Advisors, Inc. also assists the General Partners in
negotiating the leases.  For these services, the Partnership has agreed to pay
CNL Fund Advisors, Inc. an annual fee of one percent of the sum of gross
operating revenues from Properties wholly owned by the Partnership plus the
Partnership's allocable share of gross revenues of joint ventures in which the
Partnership is a co-venturer, but not in excess of competitive fees for
comparable services.  Under the management agreement, the management fee is
subordinated to receipt by the Limited Partners of an aggregate, ten percent,
cumulative, noncompounded annual return on their adjusted capital contributions
(the "10% Preferred Return"), calculated in accordance with the Partnership's
limited partnership agreement (the "Partnership Agreement").  In any year in
which the Limited Partners have not received the 10% Preferred Return, no
management fee will be paid.

     The management agreement continues until the Partnership no longer owns an
interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.

Employees

     The Partnership has no employees.  The officers of CNL Realty Corporation
and the officers and employees of CNL American Properties Fund, Inc. ("APF"),
the parent company of CNL Fund Advisors, Inc., perform certain services for the
Partnership.  In addition, the General Partners have available to them the
resources and expertise of the officers and employees of CNL Financial Group,
Inc. (formerly CNL Group, Inc.) a diversified real estate company, and its
affiliates, who may also perform certain services for the Partnership.


Item 2.  Properties

     As of December 31, 1999, the Partnership owned 37 Properties.  Of the 37
Properties, 27 are owned by the Partnership in fee simple and ten are owned
through joint venture arrangements.  See Item 1. Business - Joint Venture
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its partnership agreement.  Reference is made to the Schedule of
Real Estate and Accumulated Depreciation for a listing of the Properties and
their respective costs, including acquisition fees and certain acquisition
expenses.

Description of Properties

     Land.  The Partnership's Property sites range from approximately 17,400 to
467,400 square feet depending upon building size and local demographic factors.
Sites purchased by the Partnership are in locations zoned for commercial use
which have been reviewed for traffic patterns and volume.

                                       4
<PAGE>

     The following table lists the Properties owned by the Partnership as of
December 31, 1999 by state.  More detailed information regarding the location of
the Properties is contained in the Schedule of Real Estate and Accumulated
Depreciation.

<TABLE>
<CAPTION>
      State                                          Number of Properties
      -----                                          --------------------
      <S>                                            <C>
      Arizona                                                 1
      Florida                                                 7
      Indiana                                                 1
      Louisiana                                               2
      Michigan                                                3
      Minnesota                                               1
      North Carolina                                          2
      New York                                                2
      Ohio                                                    9
      Tennessee                                               2
      Texas                                                   6
      Virginia                                                1
                                                       -------------
      TOTAL PROPERTIES                                       37
                                                       =============
</TABLE>

     Buildings.  Each of the Properties owned by the Partnership includes a
building that is one of a Restaurant Chain's approved designs. The buildings
generally are rectangular and are constructed from various combinations of
stucco, steel, wood, brick and tile. Building sizes range from approximately
1,300 to 10,900 square feet. All buildings on Properties are freestanding and
surrounded by paved parking areas. Buildings are suitable for conversion to
various uses, although modifications may be required prior to use for other than
restaurant operations. As of December 31, 1999, the Partnership had no plans for
renovation of the Properties. Depreciation expense is computed for buildings and
improvements using the straight line method using a depreciable life of 40 years
for federal income tax purposes. As of December 31, 1999, the aggregate cost of
the Properties owned by the Partnership (including its consolidated joint
venture) and the unconsolidated joint ventures, for federal income tax purposes
was $16,535,583 and $7,237,357, respectively.

     The following table lists the Properties owned by the Partnership as of
December 31, 1999 by Restaurant Chain.

<TABLE>
<CAPTION>
      Restaurant Chain                               Number of Properties
      ----------------                               --------------------
      <S>                                            <C>
      Burger King                                             13
      Denny's                                                  1
      Golden Corral                                            5
      Hardee's                                                 4
      IHOP                                                     1
      Jack in the Box                                          2
      KFC                                                      2
      Perkins                                                  1
      Popeyes                                                  1
      Quincy's                                                 1
      Shoney's                                                 5
      Wendy's                                                  1
                                                       -------------
      TOTAL PROPERTIES                                        37
                                                       =============
</TABLE>

     The General Partners considers the Properties to be well maintained and
sufficient for the Partnership's operations.

     The General Partners believe that the Properties are adequately covered by
insurance.  In addition, the General Partners have obtained contingent liability
and property coverage for the Partnership.  This insurance is intended to

                                       5
<PAGE>

reduce the Partnership's exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

     Leases.  The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains.  The leases are generally on
a long-term "triple net" basis, meaning that the tenant is responsible for
repairs, maintenance, property taxes, utilities and insurance.  Generally, a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably necessary to refurbish buildings, premises,
signs and equipment so as to comply with the lessee's obligations, if
applicable, under the franchise agreement to reflect the current commercial
image of its Restaurant Chain.  These capital expenditures are required to be
paid by the lessee during the term of the lease.  The terms of the leases of the
Properties owned by the Partnership are described in Item 1. Business - Leases.

     At December 31, 1999, 1998, 1997, 1996 and 1995, all of the Properties were
occupied.  The following is a schedule of the average rent per Property for each
of the years ended December 31:

<TABLE>
<CAPTION>
                                   1999                1998                 1997                  1996                  1995
                             ---------------     ---------------     -----------------     -----------------     -----------------
<S>                          <C>                 <C>                 <C>                   <C>                   <C>
Rental Revenues (1)               $3,365,333          $3,443,094            $3,467,720            $3,552,341            $3,676,557
Properties                                37                  36                    36                    36                    36
Average Rent per
 Property                         $   90,955          $   95,642            $   96,326            $   98,676            $  102,127
</TABLE>

(1)  Rental income includes the Partnership's share of rental income from the
     Properties owned through joint venture arrangements.  Rental revenues have
     been adjusted, as applicable, for any amounts for which the Partnership has
     established an allowance for doubtful accounts.

     The following is a schedule of lease expirations for leases in place as of
December 31, 1999 for each year for the next ten years and thereafter.

<TABLE>
<CAPTION>
                                                                                 Percentage of
         Expiration                  Number            Annual Rental             Gross Annual
            Year                    of Leases             Revenues               Rental Income
         ----------                 ---------          -------------             -------------
         <S>                        <C>                <C>                       <C>
          2000                             --             $       --                      --
          2001                             --                     --                      --
          2002                             --                     --                      --
          2003                             --                     --                      --
          2004                             --                     --                      --
          2005                             10                894,321                   26.72%
          2006                              1                118,136                    3.53%
          2007                             --                     --                      --
          2008                             --                     --                      --
          2009                              1                127,514                    3.81%
          Thereafter                       25              2,206,446                   65.94%
                                     --------           ------------               ----------
          Totals                           37             $3,346,417                  100.00%
                                     ========           ============               ==========
</TABLE>

     Leases with Major Tenants. The terms of the leases with the Partnership's
major tenants as of December 31, 1999 (see Item 1. Business - Major Tenants),
are substantially the same as those described in Item 1. Business - Leases.

     Golden Corral Corporation leases four Golden Corral restaurants.  The
initial term of each lease is 15 years (expiring in 2005) and the average
minimum base annual rent is approximately $163,500 (ranging from approximately
$145,500 to $189,700).

                                       6
<PAGE>

     Restaurant Management Services leases four Shoney's restaurants and one
Popeyes restaurant.  The initial term of each lease is 20 years (expiring
between 2010 and 2015) and the average minimum base annual rent is approximately
$104,500 (ranging from approximately $41,300 to $139,400).

     Carrols Corporation leases five Burger King restaurants.  The initial term
of each lease is 20 years (expiring in 2011) and the average minimum base annual
rent is approximately $83,600 (ranging from approximately $67,700 to $93,700).

Competition

     The fast-food and family-style restaurant business is characterized by
intense competition.  The restaurants on the Partnership's Properties compete
with independently owned restaurants, restaurants which are part of local or
regional chains, and restaurants in other well-known national chains, including
those offering different types of food and service.


Item 3.  Legal Proceedings

     On May 11, 1999, four limited partners in several CNL Income Funds served a
derivative and purported class action lawsuit filed April 22, 1999 against the
General Partners and APF in the Circuit Court of the Ninth Judicial Circuit of
Orange County, Florida, alleging that the General Partners breached their
fiduciary duties and violated provisions of certain of the CNL Income Fund
partnership agreements in connection with the proposed Merger.  The plaintiffs
are seeking unspecified damages and equitable relief.  On July 8, 1999, the
plaintiffs filed an amended complaint which, in addition to naming three
additional plaintiffs, includes allegations of aiding and abetting and
conspiring to breach fiduciary duties, negligence and breach of duty of good
faith against certain of the defendants and seeks additional equitable relief.
As amended, the caption of the case is Jon Hale, Mary J. Hewitt, Charles A.
                                      -------------------------------------
Hewitt, Gretchen M. Hewitt, Bernard J. Schulte, Edward M. and Margaret Berol
----------------------------------------------------------------------------
Trust, and Vicky Berol v. James M. Seneff, Jr., Robert A. Bourne, CNL Realty
----------------------------------------------------------------------------
Corporation, and CNL American Properties Fund, Inc., Case No. CIO-99-0003561.
----------------------------------------------------

     On June 22, 1999, a limited partner of several CNL Income Funds served a
purported class action lawsuit filed April 29, 1999 against the General Partners
and APF, Ira Gaines, individually and on behalf of a class of persons similarly
         ----------------------------------------------------------------------
situated, v. CNL American Properties Fund, Inc., James M. Seneff, Jr., Robert A.
--------------------------------------------------------------------------------
Bourne, CNL Realty Corporation, CNL Fund Advisors, Inc., CNL Financial
----------------------------------------------------------------------
Corporation a/k/a CNL Financial Corp., CNL Financial Services, Inc. and CNL
---------------------------------------------------------------------------
Group, Inc., Case NO. CIO-99-3796, in the Circuit Court of the Ninth Judicial
-----------
Circuit of Orange County, Florida, alleging that the General Partners breached
their fiduciary duties and that APF aided and abetted their breach of fiduciary
duties in connection with the proposed Merger. The plaintiff is seeking
unspecified damages and equitable relief.

     On September 23, 1999, Judge Lawrence Kirkwood entered an order
consolidating the two cases under the caption In re: CNL Income Funds
                                              -----------------------
Litigation, Case No. 99-3561.  Pursuant to this order, the plaintiffs in these
----------------------------
cases filed a consolidated and amended complaint on November 8, 1999.  On
December 22, 1999, the General Partners and CNL Group, inc. filed motions to
dismiss and motions to strike.  On December 28, 1999, APF and CNL Fund Advisors,
Inc. filed motions to dismiss.  On March 6, 2000, all of the defendants filed a
Joint Notice of Filing Form 8-K Reports and Suggestion of Mootness.


Item 4.  Submission of Matters to a Vote of Security Holders

     Not applicable.

                                       7
<PAGE>

                                    PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

(a)  As of March 15, 2000, there were 3,428 holders of record of the Units.
There is no public trading market for the Units, and it is not anticipated that
a public market for the Units will develop. During 1999, Limited Partners who
wished to sell their Units may have offered the Units for sale pursuant to the
Partnership's distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their distributions used to acquire additional Units (to the
extent Units were available for purchase), may have done so pursuant to such
Plan. The General Partners had the right to prohibit transfers of Units. From
inception through December 31, 1999, the price paid for any Unit transferred
pursuant to the Plan was $.95 per Unit. The price paid for any Unit transferred
other than pursuant to the Plan was subject to negotiation by the purchaser and
the selling Limited Partner. The Partnership will not redeem or repurchase
Units.

     The following table reflects, for each calendar quarter, the high, low and
average sales prices for transfers of Units during 1999 and 1998 other than
pursuant to the Plan, net of commissions.

<TABLE>
<CAPTION>
                                                  1999 (1)                                        1998 (1)
                                ------------------------------------------    ---------------------------------------------
                                    High            Low          Average           High             Low           Average
                                -----------    -----------    ------------    ------------      ---------     -------------
       <S>                      <C>            <C>            <C>             <C>               <C>           <C>
       First Quarter                  $0.95          $0.95           $0.95              (2)            (2)               (2)
       Second Quarter                  0.88           0.81            0.85           $ .98           $.80              $.92
       Third Quarter                   0.95           0.89            0.94             .95            .95               .95
       Fourth Quarter                  0.90           0.81            0.86            1.00            .76               .92
</TABLE>

(1)  A total of 237,980 and 255,125 Units were transferred other than pursuant
     to the Plan for the years ended December 31, 1999 and 1998, respectively.

(2)  No transfer of Units took place during the quarter other than pursuant to
     the Plan.

     The capital contribution per Unit was $1.  All cash available for
distribution will be distributed to the partners pursuant to the provisions of
the Partnership Agreement.

     For the years ended December 31, 1999 and 1998, the Partnership declared
cash distributions of $3,150,004 and $3,850,003, respectively, to the Limited
Partners.  For each of the quarters ended March 31, 1998 and December 31, 1998,
the Partnership declared special distributions to the Limited Partners of
$350,000, which represented cumulative excess operating reserves.  No amounts
distributed to partners for the years ended December 31, 1999 and 1998, are
required to be or have been treated by the Partnership as a return of capital
for purposes of calculating the Limited Partners' return on their adjusted
capital contributions.  No distributions have been made to the General Partners
to date.  As indicated in the chart below, these distributions were declared at
the close of each of the Partnership's calendar quarters.  These amounts include
monthly distributions made in arrears for the Limited Partners electing to
receive distributions on this basis.

<TABLE>
<CAPTION>
               Quarter Ended                              1999                    1998
               -------------                         --------------           -------------
               <S>                                   <C>                      <C>
               March 31                                     $787,501              $1,137,500
               June 30                                       787,501                 787,501
               September 30                                  787,501                 787,501
               December 31                                   787,501               1,137,501
</TABLE>

     The Partnership intends to continue to make distributions of cash available
for distribution to the Limited Partners on a quarterly basis, although some
Limited Partners, in accordance with their election, receive monthly
distributions, for an annual fee.

(b)    Not applicable.

                                       8
<PAGE>

Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                                       1999                  1998                 1997                 1996                1995
                                -----------------     -----------------    ----------------     ----------------    ----------------
<S>                             <C>                   <C>                  <C>                  <C>                 <C>
Year ended December 31:
 Revenues (1)                         $ 3,500,669           $ 3,625,906         $ 3,619,489          $ 3,593,610         $ 3,667,137
 Net income (2)                         2,810,064             3,288,912           3,241,567            3,096,992           3,336,755
 Cash distributions
   declared (3)                         3,150,004             3,850,003           3,150,003            3,412,500           3,325,002
 Net income per Unit
   (2)                                      0.079                 0.093               0.092                0.088               0.094
 Cash distributions
   declared per Unit (3)                    0.090                 0.110               0.090                0.098               0.095

At December 31:
 Total assets                         $31,479,495           $32,071,119         $32,258,296          $32,437,106         $32,575,586
 Partners' capital                     30,315,367            30,655,307          31,216,398           31,124,834          31,440,342
</TABLE>

(1)  Revenues include equity in earnings from joint ventures.

(2)  Net income for the year ended December 31, 1998 and 1995, includes $108,176
     and $71,638, respectively, from gain on sale of land and buildings.  In
     addition, net income for the years ended December 31, 1996 and 1995,
     includes $99,031 and $11,712, respectively, from a loss on sale of land and
     buildings.

(3)  Distributions for the years ended December 31, 1998, 1996, and 1995,
     include special distributions to the Limited Partners of $350,000,
     $262,500, and $175,000, respectively, which represented cumulative excess
     operating reserves.  Distributions for the year ended December 31, 1998
     include an additional special distribution to the Limited Partners of
     $350,000 declared the first quarter of 1998 from cumulative excess
     operating reserves.

     The above selected financial data should be read in conjunction with the
financial statements and related notes contained in Item 8 hereof.


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

     The Partnership was organized on August 18, 1989, to acquire for cash,
either directly or through joint venture arrangements, both newly constructed
and existing restaurant Properties, as well as land upon which restaurant
Properties were to be constructed, which are leased primarily to operators of
selected national and regional fast-food and family-style Restaurant Chains.
The leases are generally triple-net leases, with the lessee generally
responsible for all repairs and maintenance, property taxes, insurance and
utilities.  As of December 31, 1999, the Partnership owned 37 Properties, either
directly or indirectly through joint venture arrangements.

Capital Resources

     The Partnership's primary source of capital for the years ended December
31, 1999, 1998, and 1997 was cash from operations (which includes cash received
from tenants, distributions from joint ventures and interest received, less cash
paid for expenses).  Cash from operations was $3,321,006, $3,562,592 and
$3,543,056 for the years ended December 31, 1999, 1998 and 1997, respectively.
The increase in cash from operations for 1999, as compared to 1998, was
primarily a result of changes in income and expenses as described in "Results of
Operations" below and changes in the Partnership's working capital, and the
increase in cash from operations for 1998, as compared to 1997, was primarily a
result of changes in the Partnership's working capital.

     Other sources and uses of capital included the following during the years
ended December 31, 1999, 1998 and 1997.

                                       9
<PAGE>

     In July 1998, the Partnership received $116,397 as a settlement from the
Florida Department of Transportation for a right of way taking relating to a
parcel of land on its Property in Brooksville, Florida.  In connection
therewith, the Partnership recognized a gain of $108,176 for financial reporting
purposes. The Partnership distributed amounts sufficient to enable the limited
partners to pay federal and state income taxes, if any (at a level reasonably
assumed by the General Partners), resulting from the right of way taking.

  As of December 31, 1999, the Partnership had accepted three promissory notes
in connection with the sale of three of its Properties.  During the year ended
December 31, 1999, the borrower relating to one of the promissory notes prepaid
principal of $272,500, which was applied to the outstanding principal balance.

     In November 1999, the Partnership reinvested the right of way taking
proceeds and the prepaid principal in a joint venture, Bossier City Joint
Venture, with CNL Income Fund XII, Ltd. and CNL Income Fund XIV, Ltd., both
Florida limited partnerships and affiliates of the General Partners.  The joint
venture was formed to purchase and hold one Property.  The Partnership
contributed a total of $448,531 to the joint venture and owns a 34 percent
interest in its profits and losses.

     None of the Properties owned by the Partnership or the joint ventures, in
which the Partnership owns an interest, is or may be encumbered.  Under its
Partnership Agreement, the Partnership is prohibited from borrowing for any
purpose; provided, however, that the General Partners or their affiliates are
entitled to reimbursement, at cost, for actual expenses incurred by the General
Partners or their affiliates on behalf of the Partnership.  Affiliates of the
General Partners from time to time incur certain operating expenses on behalf of
the Partnership for which the Partnership reimburses the affiliates without
interest.

     Currently, rental income from the Partnership's Properties and net sales
proceeds from the sale of Properties, pending reinvestment in additional
Properties, are invested in money market accounts or other short-term, highly
liquid investments such as demand deposit accounts at commercial banks,
certificates of deposit, and money market accounts with less than a 30-day
maturity date, pending the Partnership's use of such funds to pay Partnership
expenses or to make distributions to the partners.  At December 31, 1999, the
Partnership had $1,503,989 invested in such short-term investments as compared
to $1,809,258 at December 31, 1998.  The decrease at December 31, 1999, as
compared to December 31, 1998, was primarily due to the fact that the
Partnership paid a special distribution of cumulative excess operating reserves
to the Limited Partners of $350,000 during 1999, which was declared during 1998.
As of December 31, 1999, the average interest rate earned by the Partnership on
the rental income deposited in demand deposit accounts at commercial banks was
approximately 2.35 percent annually.  The funds remaining at December 31, 1999,
after the payment of distributions and other liabilities, will be used to meet
the Partnership's working capital and other needs.

Short-Term Liquidity

     The Partnership's short-term liquidity requirements consist primarily of
the operating expenses of the Partnership.

     The Partnership's investment strategy of acquiring Properties for cash and
leasing them under triple-net leases to operators who generally meet specified
financial standards minimizes the Partnership's operating expenses.  The General
Partners believe that the leases will continue to generate cash flow in excess
of operating expenses.

     Due to low operating expenses and ongoing cash flow, the General Partners
believe that the Partnership has sufficient working capital reserves at this
time.  In addition, because all leases of the Partnership's Properties are
generally on a triple-net basis, it is not anticipated that a permanent reserve
for maintenance and repairs will be established at this time.  To the extent,
however, that the Partnership has insufficient funds for such purposes, the
General Partners will contribute to the Partnership an aggregate amount of up to
one percent of the offering proceeds for maintenance and repairs.

     The General Partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.

     The Partnership generally distributes cash from operations remaining after
the payment of the operating expenses of the Partnership, to the extent that the
General Partners determine that such funds are available for distribution.
Based on cash from operations, and for the year ended December 31, 1998,
cumulative excess operating

                                       10
<PAGE>

reserves, the Partnership declared distributions to the Limited Partners of
$3,150,004, $3,850,003 and $3,150,003 for the years ended December 31, 1999,
1998 and 1997, respectively. This represents distributions of $0.09, $0.11 and
$0.09 per Unit for the years ended December 31, 1999, 1998 and 1997,
respectively. No amounts distributed to the Limited Partners for the years ended
December 31, 1999, 1998 and 1997, are required to be or have been treated by the
Partnership as a return of capital for purposes of calculating the Limited
Partners' return on their adjusted capital contributions. The Partnership
intends to continue to make distributions of cash available for distribution to
the Limited Partners on a quarterly basis.

     During 1999, 1998 and 1997, affiliates incurred $157,819, $98,613 and
$80,998, respectively, for certain operating expense on behalf of the
Partnership.  As of December 31, 1999 and 1998, the Partnership owed $66,277 and
$20,216, respectively, to affiliates for such amounts and accounting and
administrative services.  As of March 15, 2000, the Partnership had reimbursed
the affiliates all such amounts.  In addition, as of December 31, 1999, the
Partnership had incurred $55,050 in real estate disposition fees due to an
affiliate as a result of services in connection with the sale of several
Properties.  The payment of such fees is deferred until the Limited Partners
have received the sum of their 10% Preferred Return and their adjusted capital
contributions.  Other liabilities of the Partnership, including distributions
payable, decreased to $934,222 at December 31, 1999, from $1,231,946 at December
31, 1998.  The decrease in other liabilities was primarily attributable to the
Partnership's paying a special distribution to the Limited Partners of $350,000
during the year ended December 31, 1999, from cumulative excess operating
reserves.  No special distribution was accrued at December 31, 1999.  The
General Partners believe that the Partnership has sufficient cash on hand to
meet its current working capital needs.

Long-Term Liquidity

     The Partnership has no long-term debt or other long-term liquidity
requirements.

Results of Operations

     During 1999, 1998 and 1997, the Partnership and its consolidated joint
venture, Woodway Joint Venture, owned and leased 28 wholly owned Properties.
During 1997 and 1998, the Partnership was a co-venturer in three joint ventures
that owned and leased a total of eight Properties.  In addition, during 1999,
the Partnership was a co-venturer in one additional joint venture that owned and
leased one Property.  As of December 31, 1999, the Partnership owned, either
directly or through joint venture arrangements, 37 Properties which are subject
to long-term, triple-net leases.  The leases of the Properties provide for
minimum base annual rental amounts (payable in monthly installments) ranging
from approximately $41,300 to $213,800.  All of the leases provide for
percentage rent based on sales in excess of a specified amount.  In addition, a
majority of the leases provide that, commencing in specified lease years
(ranging from the third to sixth lease year), the annual base rent required
under the terms of the lease will increase.  For further description of the
Partnership's leases and Properties, see Item 1. Business - Leases and Item 2.
Properties, respectively.

     During the years ended December 31, 1999, 1998 and 1997, the Partnership
and its consolidated joint venture earned $2,901,093, $2,991,048 and $3,015,642,
respectively, in rental income from operating leases and earned income from
direct financing leases.  The decrease in rental and earned income for 1999 and
1998, each as compared to the prior year, was primarily due to the fact that the
leases relating to the Burger King Properties in New City and Syracuse, New York
and New Philadelphia and Mansfield, Ohio, were amended to provide for rent
reductions from August 1998 through the end of the lease terms.

     For the years ended December 31, 1999, 1998 and 1997, the Partnership also
earned $113,285, $101,911 and $85,735, respectively, in contingent rental
income.  The increase in contingent rental income for 1999, as compared to 1998,
and the increase during 1998, as compared to 1997, was primarily attributable to
an increase in gross sales for certain restaurant Properties requiring the
payment of contingent rental income.

     During the years ended December 31, 1999, 1998 and 1997, the Partnership
also earned $223,683, $269,744 and $238,338, respectively, in interest and other
income.  The decrease in interest and other income during 1999, as compared to
1998, was primarily attributable to a reduction in interest income as a result
of the prepayment of principal on a mortgage note of $272,500 during 1999, as
described above in "Capital Resources".

                                       11
<PAGE>

     For the years ended December 31, 1999, 1998 and 1997, the Partnership also
earned $276,012, $276,721 and $293,480, respectively, attributable to net income
earned by unconsolidated joint ventures in which the Partnership is a co-
venturer.  The decrease in net income by joint ventures for 1999 and 1998, each
as compared to the prior year, was primarily due to the fact that the lease
relating to the Burger King Property in Asheville, North Carolina of Asheville
Joint Venture was amended to provide for rent reductions from August 1998
through the end of the lease term.

     During the year ended December 31, 1999, three lessees of the Partnership
and its consolidated joint venture, Golden Corral Corporation, Carrols
Corporation and Restaurant Management Services, Inc., each contributed more than
ten percent of the Partnership's total rental income (including rental income
from the Partnership's consolidated joint venture and the Partnership's share of
rental income from nine Properties owned by joint ventures).  As of December 31,
1999, Golden Corral Corporation was the lessee under leases relating to four
restaurants, Carrols Corporation was the lessee under leases relating to five
restaurants and, Restaurant Management Services, Inc. was the lessee under
leases relating to five restaurants.  It is anticipated that, based on the
minimum annual rental payments required by the leases, these three lessees will
continue to contribute more than ten percent of the Partnership's total rental
income during 2000.  In addition, during the year ended December 31, 1999, three
Restaurant Chains, Golden Corral Family Steakhouse Restaurants, Burger King and
Shoney's, each accounted for more than ten percent of the Partnership's total
rental income (including rental income from the Partnership's consolidated joint
venture and the Partnership's share of rental income from nine Properties owned
by unconsolidated joint ventures).  In 2000, it is anticipated that these three
Restaurant Chains each will continue to account for more than ten percent of the
Partnership's total rental income to which the Partnership is entitled under the
terms of the leases.  Any failure of these lessees or Restaurant Chains could
materially affect the Partnership's income if the Partnership is not able to re-
lease the Property in a timely manner.

     Operating expenses, including depreciation and amortization expense, were
$690,605, $445,170 and $377,922 for the years ended December 31, 1999, 1998 and
1997, respectively.  The increase in operating expenses during 1999 and 1998,
each as compared to the prior year, was partially due to an increase in
depreciation expense relating to the fact that during 1998, the Partnership
reclassified the leases for its Properties in New City and Syracuse, New York,
and New Philadelphia and Mansfield, Ohio, from direct financing leases to
operating leases, as a result of lease amendments, as described above.

     The increase in operating expenses for 1999 and 1998, was also partially
due to the fact that the Partnership incurred $185,446 and $21,042,
respectively, in transaction costs related to the General Partners retaining
financial and legal advisors to assist them in evaluating and negotiating the
proposed Merger with APF, as described in "Termination of  Merger".

     As a result of the right of way settlement for the Partnership's Property
in Brooksville, Florida, as described above in "Capital Resources," the
Partnership recognized a gain on sale of land of $108,176 during the year ended
December 31, 1998, for financial reporting purposes.  No Properties were sold
during 1999 and 1997.

     The Partnership's leases as of December 31, 1999, are generally triple-net
leases and contain provisions that the General Partners believe mitigate the
adverse effect of inflation.  Such provisions include clauses requiring the
payment of percentage rent based on certain restaurant sales above a specified
level and/or automatic increases in base rent at specified times during the term
of the lease.  Management expects that increases in restaurant sales volume due
to inflation and real sales growth should result in an increase in rental income
over time.  Continued inflation also may cause capital appreciation of the
Partnership's Properties.  Inflation and changing prices, however, also may have
an adverse impact on the sales of the restaurants and on potential capital
appreciation of the Properties.

Termination of Merger

   On March 11, 1999, the Partnership entered into an Agreement and Plan of
Merger with APF, pursuant to which the Partnership would be merged with and into
a subsidiary of APF.  Under the Agreement and Plan of Merger, APF was to issue
shares of its common stock as consideration for the Merger.  On March 1, 2000,
the General Partners and APF announced that they had mutually agreed to
terminate the Agreement and Plan of Merger.  The agreement to terminate the
Agreement and Plan of Merger was based, in large part, on the General Partners'
concern that, in light of market conditions relating to publicly traded real
estate investment trusts, the value of the transaction had diminished.  As a
result of such diminishment, the General Partners' ability to unequivocally
recommend voting for the transaction, in the exercise of their fiduciary duties,
had become questionable.

                                       12
<PAGE>

Overview of Year 2000 Problem

     The year 2000 problem concerns the inability of information and non-
information technology systems to properly recognize and process date-sensitive
information beyond January 1, 2000.  The failure to accurately recognize the
year 2000 could result in a variety of problems from data miscalculations to the
failure of entire systems.

Status

  The Partnership generally does not directly own information technology
systems.  The General Partner and their affiliates generally provide all
services requiring the use of information and some non-information technology
systems pursuant to the Advisory Agreement with the Partnership.  In early 1998,
affiliates of the General Partner formed a year 2000 committee ("the Y2K Team")
that assessed the readiness of any systems that are date sensitive and completed
upgrades for the hardware equipment and software that was not year 2000
compliant, as necessary.  The cost for these upgrades and other remedial
measures is the responsibility of the General Partner and their affiliates.  The
General Partner and their affiliates do not expect that the Partnership will
incur any costs in connection with the year 2000 remedial measures.  In
addition, the Y2K Team requested and received certifications of compliance from
other companies with which the General Partner, their affiliates, and the
Partnership have material third party relationships.

  In assessing the risks presented by the year 2000 problem, the Y2K Team
identified potential worst case scenarios involving the future of the
information and non-information technology systems used by the Partnership's
transfer agent, financial institutions and tenants.  As of January 14, 2000, the
General Partner and their affiliates have tested the information and non-
information technology systems used by the Partnership and have not experienced
material disruption or other significant problems.  In addition, as of the same
date, the General Partner are not aware of any material year 2000 problems
relating to information and non-information technology systems of third parties
with which the Partnership maintains material relationships, including those of
the Partnership's transfer agent, financial institutions and tenants.  In
addition, in the Partnership's interactions with its transfer agent, financial
institutions and tenants, the systems of these third parties have functioned
normally.  Until the Partnership's first distribution in 2000 and the delivery
of the information by the transfer agent to stockholders in early 2000, the
General Partner will continue to monitor the year 2000 compliance of the
transfer agent.  In addition, the General Partner will continue to monitor the
systems used by the Partnership and to maintain contact with third parties with
which the Partnership has material relationships with respect to year 2000
compliance and any year 2000 issues that may arise at a later date.  The General
Partner will develop contingency plans relating to ongoing year 2000 issues at
the time that such issues are identified and such plans are deemed necessary.

  Based on the information provided to the Y2K Team, the upgrades and remedial
measures by the General Partner and their affiliates, and the normal functioning
to date of information and non-information technology systems used by the
Partnership and those third parties, the General Partner do not foresee
significant risks associated with its year 2000 compliance at this time.  In
addition, the General Partner and their affiliates do not expect to incur any
additional costs in connection with the year 2000 remedial efforts.  However,
there can be no assurance that the General Partner and their affiliates or any
third parties will not have ongoing year 2000 issues that may have adverse
effects on the Partnership.

                                       13
<PAGE>

Interest Rate Risk

     The Partnership has provided fixed rate mortgages to borrowers.  The
principal amounts outstanding under the mortgage notes totaled $1,460,765 at
December 31, 1999. The General Partners believe that the estimated fair value of
the mortgage notes at December 31, 1999 approximated the outstanding principal
amounts.

     The Partnership is exposed to equity loss in the event of changes in
interest rates.  The fair value of the mortgage notes would decline if interest
rates rise.

     The following table presents the expected cash flows of principal that are
sensitive to these changes.

<TABLE>
<CAPTION>
                                                       Mortgage Notes
                                                         Fixed Rates
                                                       --------------
                 <S>                                   <C>
                 2000                                  $       48,702
                 2001                                          54,172
                 2002                                          60,256
                 2003                                          67,022
                 2004                                          74,553
                 Thereafter                                 1,156,060
                                                       --------------

                                                       $    1,460,765
                                                       ==============
</TABLE>

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

     This information is described above in Item 7.  Management's Discussion and
Analysis of Financial Condition -- Interest Rate Risk.


Item 8.  Financial Statements and Supplementary Data

                                       14
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                                    CONTENTS



<TABLE>
<CAPTION>
                                                      Page
                                                      ----
<S>                                                   <C>
Report of Independent Certified Public Accountants      16

Financial Statements:

  Balance Sheets                                        17

  Statements of Income                                  18

  Statements of Partners' Capital                       19

  Statements of Cash Flows                              20

  Notes to Financial Statements                         22
</TABLE>

                                       15
<PAGE>

               Report Of Independent Certified Public Accountants
               --------------------------------------------------


To the Partners
CNL Income Fund VIII, Ltd.


In our opinion, the financial statements listed in the index appearing under
item 14(a)(1) present fairly, in all material respects, the financial position
of CNL Income Fund VIII, Ltd. (a Florida limited partnership) at December 31,
1999 and 1998, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States.  In addition, in
our opinion, the financial statement schedules listed in the index appearing
under item 14(a)(2) present fairly, in all material respects, the information
set forth therein when read in conjunction with the related financial
statements.  These financial statements and financial statement schedules are
the responsibility of the Partnership's management; our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits.  We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for the opinion expressed above.



/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 4, 2000, except for Note 11 for which the date is March 1, 2000

                                       16
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                                 BALANCE SHEETS
                                 --------------


<TABLE>
<CAPTION>
                                                                         December 31,
                                                                1999                     1998
                                                            --------------      --------------------
<S>                                                         <C>                 <C>
                     ASSETS
                     ------

Land and buildings on operating leases, less
  accumulated depreciation                                   $  15,469,090             $  15,769,278
Net investment in direct financing leases                        7,635,861                 7,802,785
Investment in joint ventures                                     3,197,857                 2,809,759
Mortgage notes receivable                                        1,473,571                 1,811,726
Cash and cash equivalents                                        1,503,989                 1,809,258
Receivables, less allowance for doubtful
 accounts of $5,764 and $24,636, respectively                      112,454                    84,265
Prepaid expenses                                                    15,485                     3,959
Accrued rental income, less allowance for
  doubtful accounts of $4,501 in 1999 and
  1998                                                           2,018,517                 1,927,418
Other assets                                                        52,671                    52,671
                                                             -------------             -------------

                                                             $  31,479,495             $  32,071,119
                                                             =============             =============

        LIABILITIES AND PARTNERS' CAPITAL
        ---------------------------------

Accounts payable                                             $     114,170             $       4,258
Escrowed real estate taxes payable                                   9,157                    27,838
Distributions payable                                              787,501                 1,137,501
Due to related parties                                             121,327                    75,266
Rents paid in advance                                               23,394                    62,349
                                                             -------------             -------------
     Total liabilities                                           1,055,549                 1,307,212

Minority interest                                                  108,579                   108,600

Partners' capital                                               30,315,367                30,655,307
                                                             -------------             -------------

                                                             $  31,479,495             $  32,071,119
                                                             =============             =============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                       17
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                              STATEMENTS OF INCOME
                              --------------------


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                                  1999                  1998                   1997
                                                             -------------          -------------          -------------
<S>                                                          <C>                    <C>                    <C>
Revenues:
  Rental income from operating leases                        $   1,961,199          $   1,897,209          $   1,804,273
  Earned income from direct financing leases                       939,894              1,093,839              1,211,369
  Contingent rental income                                         113,285                101,911                 85,735
  Interest and other income                                        223,683                269,744                238,338
                                                             -------------          -------------          -------------
                                                                 3,238,061              3,362,703              3,339,715
                                                             -------------          -------------          -------------
Expenses:
  General operating and administrative                             150,176                146,943                140,586
  Professional services                                             35,453                 24,837                 23,284
  State and other taxes                                             19,342                  5,372                  5,081
  Depreciation                                                     300,188                246,976                208,971
  Transaction costs                                                185,446                 21,042                     --
                                                             -------------          -------------          -------------
                                                                   690,605                445,170                377,922
                                                             -------------          -------------          -------------

Income Before Minority Interest in Income
  of Consolidated Joint Venture, Equity in
  Earnings of Unconsolidated Joint Ventures and
  Gain on Sale of Land and Buildings                             2,547,456              2,917,533              2,961,793

Minority Interest in Income of Consolidated
  Joint Venture                                                    (13,404)               (13,518)               (13,706)

Equity in Earnings of Unconsolidated Joint
  Ventures                                                         276,012                276,721                293,480

Gain on Sale of Land and Buildings                                      --                108,176                     --
                                                             -------------          -------------          -------------

Net Income                                                   $   2,810,064          $   3,288,912          $   3,241,567
                                                             =============          =============          =============

Allocation of Net Income
  General Partners                                           $      28,101          $      31,807          $      32,416
  Limited partners                                               2,781,963              3,257,105              3,209,151
                                                             -------------          -------------          -------------

                                                                 2,810,064              3,288,912          $   3,241,567
                                                             =============          =============          =============

Net Income Per Limited Partner Unit                          $       0.079          $       0.093          $       0.092
                                                             =============          =============          =============

Weighted Average Number of
  Limited Partner Units Outstanding                             35,000,000             35,000,000             35,000,000
                                                             =============          =============          =============
</TABLE>
         See accompanying notes to consolidated financial statements.

                                       18
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                        STATEMENTS OF PARTNERS' CAPITAL
                        -------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


<TABLE>
<CAPTION>
                                       General Partners                                    Limited Partners
                             ---------------------------------  -------------------------------------------------------------------
                                                  Accumulated                                       Accumulated      Syndication
                               Contributions       Earnings      Contributions    Distributions       Earnings          Costs
                             -----------------    -----------    -------------    -------------     ------------     -------------
<S>                          <C>                  <C>            <C>              <C>               <C>              <C>
Balance, December 31, 1996              $1,000       $193,025      $35,000,000     $(19,184,638)     $19,130,447     $(4,015,000)

 Distributions to limited
   partners ($0.090 per
   limited partner unit)                    --             --               --       (3,150,003)              --              --
 Net Income                                 --         32,416               --               --        3,209,151              --
                             -----------------    -----------    -------------    -------------     ------------     -------------

Balance, December 31, 1997               1,000        225,441       35,000,000      (22,334,641)      22,339,598      (4,015,000)

 Distributions to limited
   partners ($0.110 per
   limited partner unit)                    --             --               --       (3,850,003)              --              --
 Net income                                 --         31,807               --               --        3,257,105              --
                             -----------------    -----------    -------------    -------------     ------------     -------------

Balance, December 31, 1998               1,000        257,248       35,000,000      (26,184,644)      25,596,703      (4,015,000)

 Distributions to limited
   partners ($0.090 per
   limited partner unit)                    --             --               --       (3,150,004)              --              --
 Net income                                 --         28,101               --               --        2,781,963              --
                             -----------------    -----------    -------------    -------------     ------------     -------------

Balance, December 31, 1999              $1,000       $285,349      $35,000,000     $(29,334,648)     $28,378,666     $(4,015,000)
                             =================    ===========    =============    =============     ============     =============

<CAPTION>
                                         Total
                                   --------------
<S>                                <C>
Balance, December 31, 1996            $31,124,834

 Distributions to limited
   partners ($0.090 per
   limited partner unit)
 Net Income                             3,241,567
                                   --------------

Balance, December 31, 1997             31,216,398

 Distributions to limited
   partners ($0.110 per
   limited partner unit)
 Net income                             3,288,912
                                   --------------

Balance, December 31, 1998             30,655,307

 Distributions to limited
   partners ($0.090 per
   limited partner unit)
 Net income                             2,810,064
                                   --------------

Balance, December 31, 1999            $30,315,367
                                   ==============
</TABLE>

                See accompanying notes to financial statements.

                                       19
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                           STATEMENTS OF CASH FLOWS
                           ------------------------

<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                                      1999                  1998                        1997
                                                             -------------------     ----------------------      ------------------
<S>                                                          <C>                     <C>                         <C>
Increase (Decrease) in Cash and Cash Equivalents:

Cash Flows from Operating Activities:
     Cash received from tenants                                      $ 3,014,746            $ 3,144,635                 $ 3,114,439
     Distributions from unconsolidated joint ventures                    336,445                344,643                     356,589
     Cash paid for expenses                                             (247,332)              (185,270)                   (163,215)
     Interest received                                                   217,147                258,584                     235,243
                                                             -------------------       ----------------          ------------------
       Net cash provided by operating activities                       3,321,006              3,562,592                   3,543,056
                                                             -------------------       ----------------          ------------------

   Cash Flows from Investing Activities:
     Proceeds from sale of land and buildings                                 --                116,397                          --
     Investment in joint venture                                        (448,000)                    --                          --
     Collections on mortgage notes receivable                            335,154                 41,292                       8,799
     Other                                                                    --                     36                          --
                                                             -------------------       ----------------          ------------------
       Net cash provided by (used in) investing
         activities                                                     (112,846)               157,725                       8,799
                                                             -------------------       ----------------          ------------------

   Cash Flows from Financing Activities:
     Distributions to limited partners                                (3,500,004)            (3,500,003)                 (3,412,502)
     Distributions to holder of minority interest                        (13,425)               (13,292)                    (13,391)
                                                             -------------------
       Net cash used in financing activities                          (3,513,429)            (3,513,295)                 (3,425,893)
                                                             -------------------       ----------------          ------------------

Net Increase (Decrease) in Cash and Cash Equivalents                    (305,269)               207,022                     125,962

Cash and Cash Equivalents at Beginning of Year                         1,809,258              1,602,236                   1,476,274
                                                             -------------------       ----------------          ------------------

Cash and Cash Equivalents at End of Year                             $ 1,503,989            $ 1,809,258                 $ 1,602,236
                                                             ===================       ================          ==================
</TABLE>

           See accompanying notes to condensed financial statements.

                                       20
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                     STATEMENTS OF CASH FLOWS - CONTINUED
                     ------------------------------------


<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                       1999                  1998                   1997
                                                               -----------------      ----------------      -----------------
<S>                                                            <C>                    <C>                   <C>
Reconciliation of Net Income to Net Cash Provided
by Operating Activities:

   Net Income                                                   $      2,810,064        $    3,288,912        $     3,241,567
                                                               -----------------      ----------------      -----------------
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation                                                      300,188               246,976                208,971
       Minority interest in income of
         consolidated joint venture                                       13,404                13,518                 13,706
       Equity in earnings of unconsolidated joint
         ventures, net of distributions                                   60,433                67,922                 63,109
       Gain on sale of land and buildings                                     --              (108,176)                    --
       Increase in receivables                                           (25,188)              (32,504)               (25,641)
       Decrease (increase) in prepaid expenses                           (11,526)                  398                     20
       Decrease in net investment in direct
         financing leases                                                166,924               177,947                178,250
       Increase in accrued rental income                                 (91,099)             (116,089)              (128,736)
       Increase (decrease) in accounts payable
         and accrued expenses                                             91,231                  (722)                 9,987
       Increase in due to related parties                                 45,530                15,617                  2,769
       Increase (decrease) in rents paid in
         advance and deposits                                            (38,955)                8,793                (20,946)
                                                               -----------------      ----------------      -----------------
         Total adjustments                                               510,942               273,680                301,489
                                                               -----------------      ----------------      -----------------

Net Cash Provided by Operating Activities                       $      3,321,006        $    3,562,592        $     3,543,056
                                                               =================      ================      =================

Supplemental Schedule of Non-Cash
   Financing Activities:

     Distributions declared and unpaid at
       December 31                                                    $  787,501            $1,137,501             $  787,501
                                                               =================      ================      =================
</TABLE>

           See accompanying notes to condensed financial statements

                                       21
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS
                         -----------------------------

                 Years Ended December 31, 1999, 1998, and 1997


1.   Significant Accounting Policies:
     -------------------------------

     Organization and Nature of Business - CNL Income Fund VIII, Ltd. (the
     -----------------------------------
     "Partnership") is a Florida limited partnership that was organized for the
     purpose of acquiring both newly constructed and existing restaurant
     properties, as well as properties upon which restaurants were to be
     constructed, which are leased primarily to operators of national and
     regional fast-food and family-style restaurant chains.

     The general partners of the Partnership are CNL Realty Corporation (the
     "Corporate General Partner"), James M. Seneff, Jr. and Robert A. Bourne.
     Mr. Seneff and Mr. Bourne are also 50 percent shareholders of the Corporate
     General Partner.  The general partners have responsibility for managing the
     day-to-day operations of the Partnership.

     Real Estate and Lease Accounting - The Partnership records the acquisition
     --------------------------------
     of land and buildings at cost, including acquisition and closing costs.
     Land and buildings are leased to unrelated third parties generally on a
     triple-net basis, whereby the tenant is generally responsible for all
     operating expenses relating to the property, including property taxes,
     insurance, maintenance and repairs.  The leases are accounted for using
     either the direct financing or the operating method.  Such methods are
     described below:

          Direct financing method - The leases accounted for using the direct
          financing method are recorded at their net investment (which at the
          inception of the lease generally represents the cost of the asset)
          (Note 4).  Unearned income is deferred and amortized to income over
          the lease terms so as to produce a constant periodic rate of return on
          the Partnership's investment in the leases.

          Operating method - Land and building leases accounted for using the
          operating method are recorded at cost, revenue is recognized as
          rentals are earned and depreciation is charged to operations as
          incurred.  Buildings are depreciated on the straight-line method over
          their estimated useful lives of 30 years.  When scheduled rentals vary
          during the lease term, income is recognized on a straight-line basis
          so as to produce a constant periodic rent over the lease term
          commencing on the date the property is placed in service.

                                       22
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


1.   Significant Accounting Policies - Continued:
     -------------------------------------------

          Accrued rental income represents the aggregate amount of income
          recognized on a straight-line basis in excess of scheduled rental
          payments to date.  Whenever a tenant defaults under the terms of its
          lease, or events or changes in circumstance indicate that the tenant
          will not lease the property through the end of the lease term, the
          Partnership either reserves or reverses the cumulative accrued
          rental income balance.

     When the properties are sold, the related cost and accumulated depreciation
     for operating leases and the net investment for direct financing leases,
     plus any accrued rental income, are removed from the accounts and gains or
     losses from sales are reflected in income.  The General Partners of the
     Partnership review the properties for impairment whenever events or changes
     in circumstances indicate that the carrying amount of the assets may not be
     recoverable through operations.  The General Partners determine whether an
     impairment in value has occurred by comparing the estimated future
     undiscounted cash flows, including the residual value of the property, with
     the carrying cost of the individual property.  If an impairment is
     indicated, the assets are adjusted to their fair value.  Although the
     General Partners have made their best estimate of these factors based on
     current conditions, it is reasonably possible that changes could occur in
     the near term which could adversely affect the General Partners' estimate
     of net cash flows expected to be generated from its properties and the need
     for asset impairment write-downs.

     When the collection of amounts recorded as rental or other income is
     considered to be doubtful, an adjustment is made to increase the allowance
     for doubtful accounts, which is netted against receivables, and to decrease
     rental or other income or increase bad debt expense for the current period,
     although the Partnership continues to pursue collection of such amounts.
     If amounts are subsequently determined to be uncollectible, the
     corresponding receivable and the allowance for doubtful accounts are
     decreased accordingly.

     Investment in Joint Ventures - The Partnership accounts for its 87.68%
     ----------------------------
     interest in Woodway Joint Venture using the consolidation method. Minority
     interest represents the minority joint venture partner's proportionate
     share of the equity in the Partnership's consolidated joint venture.  All
     significant intercompany accounts and transactions have been eliminated.

                                       23
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


1.   Significant Accounting Policies - Continued:
     -------------------------------------------

     The Partnership's investments in Asheville Joint Venture, CNL Restaurant
     Investments II, Middleburg Joint Venture and Bossier City Joint Venture are
     accounted for using the equity method since the Partnership shares control
     with affiliates which have the same General Partners.

     Cash and Cash Equivalents - The Partnership considers all highly liquid
     -------------------------
     investments with a maturity of three months or less when purchased to be
     cash equivalents.  Cash and cash equivalents consist of demand deposits at
     commercial banks and money market funds (some of which are backed by
     government securities).  Cash equivalents are stated at cost plus accrued
     interest, which approximates market value.

     Cash accounts maintained on behalf of the Partnership in demand deposits at
     commercial banks and money market funds may exceed federally insured
     levels; however, the Partnership has not experienced any losses in such
     accounts.  The Partnership limits investment of temporary cash investments
     to financial institutions with high credit standing; therefore, the
     Partnership believes it is not exposed to any significant credit risk on
     cash and cash equivalents.

     Income Taxes - Under Section 701 of the Internal Revenue Code, all income,
     ------------
     expenses and tax credit items flow through to the partners for tax
     purposes.  Therefore, no provision for federal income taxes is provided in
     the accompanying financial statements.  The Partnership is subject to
     certain state taxes on its income and property.

     Additionally, for tax purposes, syndication costs are included in
     Partnership equity and in the basis of each partner's investment.  For
     financial reporting purposes, syndication costs are netted against
     partners' capital and represent a reduction of Partnership equity and a
     reduction in the basis of each partner's investment.

     Use of Estimates - The General Partners of the Partnership have made a
     ----------------
     number of estimates and assumptions relating to the reporting of assets and
     liabilities and the disclosure of contingent assets and liabilities to
     prepare these financial statements in conformity with generally accepted
     accounting principles.  The more significant areas requiring the use of
     management estimates relate to the allowance for doubtful accounts and
     future cash flows associated with long-lived assets.  Actual results could
     differ from those estimates.

                                       24
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


2.   Leases:
     ------

     The Partnership leases its land and buildings primarily to operators of
     national and regional fast-food and family-style restaurants.  The leases
     are accounted for under the provisions of Statement of Financial Accounting
     Standards No. 13, "Accounting for Leases."  Some of the leases have been
     classified as operating leases and some of the leases have been classified
     as direct financing leases.  For property leases classified as direct
     financing leases, the building portions of the majority of property leases
     are accounted for as direct financing leases while the land portions of
     these leases are accounted for as operating leases.  Substantially all
     leases are for 14 to 25 years and provide for minimum and contingent
     rentals.  In addition, the tenant pays all property taxes and assessments,
     fully maintains the interior and exterior of the building and carries
     insurance coverage for public liability, property damage, fire and extended
     coverage.  The lease options generally allow tenants to renew the leases
     for two to four successive five-year periods subject to the same terms and
     conditions of the initial lease.  Most leases also allow the tenant to
     purchase the property at fair market value after a specified portion of the
     lease has elapsed.

3.   Land and Buildings on Operating Leases:
     --------------------------------------

     Land and buildings on operating leases consisted of the following at
December 31:

<TABLE>
<CAPTION>
                                              1999                    1998
                                      -------------------     -------------------
<S>                                   <C>                     <C>
Land                                   $        9,159,115     $         9,159,115
Buildings                                       8,295,673               8,295,673
                                      -------------------     -------------------
                                               17,454,788              17,454,788

Less accumulated depreciation                  (1,985,698)             (1,685,510)
                                      -------------------     -------------------

                                       $       15,469,090     $        15,769,278
                                      ===================     ===================
</TABLE>


     In July 1998, the Partnership received $116,397 as a settlement from the
     Florida Department of Transportation for a right of way taking related to a
     parcel of land on its property in Brooksville, Florida.  In connection
     therewith, the Partnership recognized a gain of $108,176 for financial
     reporting purposes.

                                       25
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


3.   Land and Buildings on Operating Leases - Continued:
     --------------------------------------------------

     Some leases provide for escalating guaranteed minimum rents throughout the
     lease terms.  Income from these scheduled rent increases is recognized on a
     straight-line basis over the terms of the leases.  For the years ended
     December 31, 1999, 1998, and 1997, the Partnership recognized $91,099,
     $116,089 and $128,736 (net $4,501 in reserves), respectively, of such
     rental income.

     The following is a schedule of the future minimum lease payments to be
     received on noncancellable operating leases at December 31, 1999:

<TABLE>
          <S>                                    <C>
          2000                                   $ 1,909,747
          2001                                     1,998,079
          2002                                     2,044,712
          2003                                     2,075,323
          2004                                     2,087,783
          Thereafter                              10,273,959
                                                 -----------

                                                 $20,389,603
                                                 ===========
</TABLE>

     Since lease renewal periods are exercisable at the option of the tenant,
     the above table only presents future minimum lease payments due during the
     initial lease terms.  In addition, this table does not include any amounts
     for future contingent rentals which may be received on the leases based on
     a percentage of the tenant's gross sales.

                                       26
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


4.   Net Investment in Direct Financing Leases:
     -----------------------------------------

     The following lists the components of the net investment in direct
     financing leases at December 31:

<TABLE>
<CAPTION>
                                                                  1999                  1998
                                                             -------------         -------------
          <S>                                                <C>                   <C>
          Minimum lease payments
            receivable                                         $12,988,936           $14,095,756
          Estimated residual values                              2,457,620             2,457,619
          Less unearned income                                  (7,810,695)           (8,750,590)
                                                             -------------         -------------

          Net investment in direct
            financing leases                                   $ 7,635,861           $ 7,802,785
                                                             =============         =============
</TABLE>


     In August 1998, four of the Partnership's leases were amended.  As a
     result, the Partnership reclassified these leases from direct financing
     leases to operating leases.  In accordance with the Statement of Financial
     Accounting Standards #13, "Accounting for Leases," the Partnership recorded
     each of the reclassified leases at the lower of original cost, present fair
     value, or present carrying value.  No losses on the termination of direct
     financing leases were recorded for financial reporting purposes.

     The following is a schedule of future minimum lease payments to be received
     on direct financing leases at December 31, 1999:

<TABLE>
<C>                           <S>                              <C>
                        2000                                      $ 1,106,822
                        2001                                        1,130,328
                        2002                                        1,142,042
                        2003                                        1,142,042
                        2004                                        1,142,042
                        Thereafter                                  7,325,660
                                                             ----------------

                                                                  $12,988,936
                                                             ================
</TABLE>

     The above table does not include future minimum lease payments for renewal
     periods or for contingent rental payments that may become due in future
     periods (See Note 3).

                                       27
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


5.   Investment in Joint Ventures:
     ----------------------------

     The Partnership has an 85.54%, a 36.8%, and a 12.46% interest in the
     profits and losses of Asheville Joint Venture, CNL Restaurant Investments
     II, and Middleburg Joint Venture, respectively.  The remaining interests in
     these joint ventures are held by affiliates of the Partnership which have
     the same general partners.  Asheville Joint Venture and Middleburg Joint
     Venture each own and lease one property, and CNL Restaurant Investments II
     owns and leases six properties to an operator of national fast-food or
     family-style restaurants.

     In November 1999, the Partnership entered into a joint venture arrangement,
     Bossier City Joint Venture, with CNL Income Fund XII, Ltd. and CNL Income
     Fund XIV, Ltd., both Florida limited partnerships and, affiliates of the
     general partners, to hold one restaurant property.  As of December 31,
     1999, the Partnership had acquired a 34 percent interest in the profits and
     losses of the joint venture.

     The following presents the joint ventures' combined, condensed financial
     information at December 31:

<TABLE>
<CAPTION>
                                                                   1999                1998
                                                            ----------------     ---------------
          <S>                                               <C>                  <C>
          Land and buildings on operating
           leases, less accumulated
           depreciation                                     $      7,467,574      $    6,320,059
          Net investment in direct financing
           lease                                                   1,300,856           1,319,045
          Cash                                                        74,120               1,176
          Receivables                                                 39,740              17,395
          Prepaid expenses                                             1,264                 719
          Accrued rental income                                      194,666             162,857
          Liabilities                                                 47,270                 580
          Partners' capital                                        9,030,950           7,820,671
          Revenues                                                 1,039,787             940,168
          Net income                                                 855,805             762,579
</TABLE>

     The Partnership recognized income totalling $276,012, $276,721, and
     $293,480 for the years ended December 31, 1999, 1998, and 1997,
     respectively, from these joint ventures.

                                       28
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                  Years Ended December 31, 1999 1998 and 1997


6.   Mortgage Notes Receivable:
     -------------------------

     As of December 31, 1996, the Partnership had accepted two promissory notes
     in the principal sum totalling $460,000 in connection with the sale of two
     of its properties in Jacksonville, Florida.  The promissory notes, which
     are collateralized by mortgages on the properties, bear interest at a rate
     of ten percent per annum, and are being collected in 119 equal monthly
     installments of $2,106 and $1,931, with balloon payments of $218,252 and
     $200,324, respectively, due in December 2005.

     In addition, in connection with the sale in 1996 of its property in
     Orlando, Florida, the Partnership accepted a promissory note in the
     principal sum of $1,388,568, representing the gross sales price of
     $1,375,000, plus tenant closing costs of $13,568 that the Partnership
     financed on behalf of the tenant. The promissory note bears interest at a
     rate of 10.75% per annum, is collateralized by a mortgage on the property
     and is being collected in 12 monthly installments of interest only, in 17
     monthly installments of $15,413 consisting of principal and interest, and
     thereafter in 151 monthly installments of $12,633 consisting of principal
     and interest.  During the year ended December 31, 1999, the borrower
     prepaid principal in the amount of $272,500.  This amount was applied to
     the outstanding principal balance.

     The mortgage notes receivable consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                   1999                 1998
                                                            ----------------     ----------------
           <S>                                                 <C>                  <C>
          Principal balance                                       $1,460,765           $1,795,920
          Accrued interest receivable                                 12,806               15,806
                                                            ----------------     ----------------

                                                                  $1,473,571           $1,811,726
                                                            ================     ================
</TABLE>

     The General Partners believe that the estimated fair value of mortgage
     notes receivable at December 31, 1999 and 1998, approximated the
     outstanding principal amount based on estimated current rates at which
     similar loans would be made to borrowers with similar credit and for
     similar maturities.

                                       29
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                  Years Ended December 31, 1999 1998 and 1997


7.   Allocations and Distributions:
     -----------------------------

     Generally, all net income and net losses of the Partnership, excluding
     gains and losses from the sale of properties, are allocated 99 percent to
     the limited partners and one percent to the General Partners.
     Distributions of net cash flow are made 99 percent to the limited partners
     and one percent to the General Partners; provided, however, that the one
     percent of net cash flow to be distributed to the General Partners is
     subordinated to receipt by the limited partners of an aggregate, ten
     percent, cumulative, noncompounded annual return on their adjusted capital
     contributions (the "10% Preferred Return").

     Generally, net sales proceeds from the sale of properties not in
     liquidation of the Partnership, to the extent distributed, will be
     distributed first to the limited partners in an amount sufficient to
     provide them with their 10% Preferred Return, plus the return of their
     adjusted capital contributions.  The General Partners will then receive, to
     the extent previously subordinated and unpaid, a one percent interest in
     all prior distributions of net cash flow and a return of their capital
     contributions.  Any remaining sales proceeds will be distributed 95 percent
     to the limited partners and five percent to the General Partners.  Any gain
     from the sale of a property not in liquidation of the Partnership is, in
     general, allocated in the same manner as net sales proceeds are
     distributable.  Any loss from the sale of a property is, in general,
     allocated first, on a pro rata basis, to partners with positive balances in
     their capital accounts; thereafter, 95 percent to the limited partners and
     five percent to the General Partners.

     Generally, net sales proceeds from a liquidating sale of properties, will
     be used in the following order:  (i) first to pay and discharge all of the
     Partnership's liabilities to creditors, (ii) second, to establish reserves
     that may be deemed necessary for any anticipated or unforeseen liabilities
     or obligations of the Partnership, (iii) third, to pay all of the
     Partnership's liabilities, if any, to the general and limited partners,
     (iv) fourth, after allocations of net income, gains and/or losses, to
     distribute to the partners with positive capital account balances, in
     proportion to such balances, up to amounts sufficient to reduce such
     positive balances to zero, and (v) thereafter, any funds remaining shall
     then be distributed 95 percent to the limited partners and five percent to
     the General Partners.

     During the years ended December 31, 1999, 1998, and 1997, the Partnership
     declared distributions to the limited partners of $3,150,004, $3,850,003,
     and $3,150,003, respectively.  No distributions have been made to the
     General Partners to date.

                                       30
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


8.   Income Taxes:
     ------------

     The following is a reconciliation of net income for financial reporting
     purposes to net income for federal income tax purposes for the years ended
     December 31:

<TABLE>
<CAPTION>
                                                                     1999                 1998                 1997
                                                              ----------------     ----------------     ----------------
           <S>                                                <C>                  <C>                  <C>
          Net income for financial reporting purposes           $    2,810,064       $    3,288,912       $    3,241,567

          Depreciation for tax reporting purposes in
            excess of depreciation for financial
            reporting purposes                                        (113,202)            (166,412)            (204,419)

          Direct financing leases recorded as operating
            leases for tax reporting purposes                          166,924              177,946              178,250

          Allowance for doubtful accounts                              (18,872)               5,408               18,954

          Accrued rental income                                        (91,099)            (116,089)            (133,237)

          Rents paid in advance                                        (38,955)               9,293              (21,446)

          Gain or loss on sale of land and buildings for tax
            reporting purposes in excess of gain or loss
            for financial reporting purposes                            38,341                3,170                  670

          Capitalized transaction costs for tax reporting
            purposes                                                   185,446               21,042                   --

          Equity in earnings of unconsolidated joint
            ventures for tax reporting purposes in excess
            of (less than) equity in earnings of
            unconsolidated joint ventures for financial
            reporting purposes                                          21,563               15,563               (2,987)

          Minority interest in timing differences of
            consolidated joint venture                                   1,292                1,443                1,571

                                                              ----------------     ----------------     ----------------
          Net income for federal income tax purposes            $    2,961,502       $    3,240,276       $    3,078,923
                                                              ================     ================     ================
</TABLE>

                                       31
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


9.   Related Party Transactions:
     --------------------------

     One of the individual General Partners, James M. Seneff, Jr., is one of the
     principal shareholders of CNL Holdings, Inc.  The other individual general
     partner, Robert A. Bourne, serves as President and Treasurer of CNL
     Financial Group, Inc., a wholly owned subsidiary of CNL Holdings, Inc., CNL
     Fund Advisors, Inc. (the "Advisor") was majority owned subsidiary of CNL
     Financial Group, Inc. until it merged with CNL American Properties Fund,
     Inc. ("APF"), effective September 1, 1999.  The individual general partners
     are stockholders and directors of APF.

     The advisor provides certain services relating to management of the
     Partnership and its properties pursuant to a management agreement with the
     Partnership.  In connection therewith, the Partnership has agreed to pay
     the Advisor an annual, noncumulative, subordinated management fee of one
     percent of the sum of gross revenues from properties wholly owned by the
     Partnership and the Partnership's allocable share of gross revenues from
     joint ventures, but not in excess of competitive fees for comparable
     services.  These fees will be incurred and will be payable only after the
     limited partners receive their 10% Preferred Return.  Due to the fact that
     these fees are noncumulative, if the limited partners have not received
     their 10% Preferred Return in any particular year, no management fees will
     be due or payable for such year.  As a result of such threshold, no
     management fees were incurred during the years ended December 31, 1999,
     1998, and 1997.

     The Advisor is also entitled to receive a deferred, subordinated real
     estate disposition fee, payable upon the sale of one or more properties
     based on the lesser of one-half of a competitive real estate commission or
     three percent of the sales price if the Advisor provides a substantial
     amount of services in connection with the sale.  However, if the net sales
     proceeds are reinvested in a replacement property, no such real estate
     disposition fees will be incurred until such replacement property is sold
     and the net sales proceeds are distributed.  The payment of the real estate
     disposition fee is subordinated to receipt by the limited partners of their
     aggregate 10% Preferred Return, plus their adjusted

                                       32
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


9.   Related Party Transactions - Continued:
     --------------------------------------

     capital contributions.  No deferred, subordinated real estate disposition
     fees were incurred for the years ended December 31, 1999, 1998 and 1997.

     During the years ended December 31, 1999, 1998, and 1997, the Advisor and
     its affiliates provided accounting and administrative services to the
     Partnership on a day-to-day basis including services relating to the
     proposed and terminated merger as described in Note 11.  The Partnership
     incurred $118,104, $96,202, and $80,461 for the years ended December 31,
     1999, 1998, and 1997, respectively, for such services.

     The due to related parties consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                           1999                1998
                                                    ----------------    -----------------
          <S>                                         <C>                 <C>

          Due to the Advisor:
            Accounting and administrative
                services                              $       66,277        $      20,216
            Deferred, subordinated real
                estate disposition fee                        55,050               55,050
                                                    ----------------    -----------------

                                                      $      121,327        $      75,266
                                                    ================    =================
</TABLE>


10.  Concentration of Credit Risk:
     ----------------------------

     The following schedule presents total rental and earned income from
     individual lessees, each representing more than ten percent of the
     Partnership's total rental and earned income (including the Partnership's
     share of total rental and earned income from the unconsolidated joint
     ventures), for each of the years ended December 31:

<TABLE>
<CAPTION>
                                                    1999              1998               1997
                                              --------------    ---------------    ---------------
          <S>                                 <C>               <C>                <C>
          Golden Corral Corporation             $    711,714       $    728,641       $    706,839
          Restaurant Management Services,
            Inc.                                     572,803            527,360            531,110
          Carrols Corporation                        419,844            482,081            523,517
</TABLE>

                                       33
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


10.  Concentration of Credit Risk - Continued:
     ----------------------------------------

     In addition, the following schedule presents total rental and earned income
     from individual restaurant chains, each representing more than ten percent
     of the Partnership's total rental and earned income (including the
     Partnership's share of total rental and earned income from the
     unconsolidated joint ventures) for each of the years ended December 31:

<TABLE>
<CAPTION>
                                                  1999              1998               1997
                                            --------------    ---------------    ---------------
          <S>                               <C>               <C>                <C>
          Burger King                          $   887,291        $   961,542       $  1,033,419
          Golden Corral Family
           Steakhouse Restaurants                  747,008            750,869            735,949
          Shoney's                                 599,081            603,304            607,054
</TABLE>

     Although the Partnership's properties are geographically diverse throughout
     the United States and the Partnership's lessees operate a variety of
     restaurant concepts, default by any one of these lessees or restaurant
     chains could significantly impact the results of operations of the
     Partnership if the Partnership is not able to re-lease the properties in a
     timely manner.

11.  Termination of Merger:
     ----------------------

     On March 11, 1999, the Partnership entered into an Agreement and Plan of
     Merger with APF, pursuant to which the Partnership would be merged with and
     into a subsidiary of APF.  Under the Agreement and Plan of Merger, APF was
     to issue shares of its common stock as consideration for the Merger.  On
     March 1, 2000, the General Partners and APF announced that they had
     mutually agreed to terminate the Agreement and Plan of Merger.  The
     agreement to terminate the Agreement and Plan of Merger was based, in large
     part, on the General Partners' concern that, in light of market conditions
     relating to publicly traded real estate investment trusts, the value of the
     transaction had diminished.  As a result of such diminishment, the General
     Partners' ability to unequivocally recommend voting for the transaction, in
     the exercise of their fiduciary duties, had become questionable.

                                       34
<PAGE>

     Item 9.   Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure

     None.

                                   PART III

     Item 10.  Directors and Executive Officers of the Registrant

     The General Partners of the Registrant are James M. Seneff, Jr., Robert A.
Bourne and CNL Realty Corporation, a Florida corporation.  The General Partners
manage and control the Partnership's affairs and have general responsibility and
the ultimate authority in all matters affecting the Partnership's business.  The
Partnership has available to it the services, personnel and experience of CNL
Fund Advisors, Inc., CNL Financial Group, Inc. and their affiliates, all of
which are affiliates of the General Partners.

     James M. Seneff, Jr., age 53,  Since 1971, Mr. Seneff has been active in
the acquisition, development, and management of real estate projects and,
directly or through an affiliated entity, has served as a general partner or co-
venturer in over 100 real estate ventures.  These ventures have involved the
financing, acquisition, construction, and leasing of restaurants, office
buildings, apartment complexes, hotels, and other real estate.  Mr. Seneff is a
principal stockholder of CNL Holdings, Inc., the parent company of CNL Financial
Group, Inc. (formerly CNL Group, Inc.), a diversified real estate company, and
has served as a director, Chairman of the Board and Chief Executive Officer of
CNL Financial Group, Inc. since its formation in 1980.  Mr. Seneff has served as
a director and Chairman of the Board since inception in 1994, and served as
Chief Executive Officer from 1994 through August 1999, of CNL American
Properties Fund, Inc., a public, unlisted real estate investment trust.  He also
served as a director, Chairman of the Board and Chief Executive Officer of CNL
Fund Advisors, Inc., the advisor to CNL American Properties Fund, Inc. until it
merged with the company in September 1999.  In addition, he serves as a
director, Chairman of the Board and Chief Executive Officer of CNL Health Care
Properties, Inc., as well as CNL Health Care Corp., the advisor to the company.
He also serves as director, Chairman of the Board and Chief Executive Officer of
CNL Hospitality Properties, Inc., a public, unlisted real estate investment
trust, as well as CNL Hospitality Corp., its advisor.  Since 1992, Mr. Seneff
has served as Chairman of the Board and Chief Executive Officer of Commercial
Net Lease Realty, Inc., a public real estate investment trust that is listed on
the New York Stock Exchange. Mr. Seneff has also served as a director, Chairman
of the Board and Chief Executive Officer of the following affiliated companies
since formation: CNL Securities Corp., since 1979; CNL Investment Company, since
1990; and CNL Institutional Advisors, a registered investment advisor for
pension plans, since 1990.  Mr. Seneff formerly served as a director of First
Union National Bank of Florida, N.A., and currently serves as the Chairman of
the Board of CNLBank.  Mr. Seneff served on the Florida State Commission on
Ethics and is a former member and past Chairman of the State of Florida
Investment Advisory Council, which recommends to the Florida Board of
Administration investments for various Florida employee retirement funds.  The
Florida Board of Administration is Florida's principal investment advisory and
money management agency and oversees the investment of more than $60 billion of
retirement funds.  Mr. Seneff received his degree in Business Administration
from Florida State University in 1968.

     Robert A. Bourne, age 52,  Since joining CNL Securities Corp. in 1979, Mr.
Bourne has participated as a general partner or co-venturer in over 100 real
estate ventures involved in the financing, acquisition, construction, and
leasing of restaurants, office buildings, apartment complexes, hotels, and other
real estate.  Mr. Bourne is the President and Treasurer of CNL Financial Group,
Inc. (formerly CNL Group, Inc.).  Mr. Bourne has served as a director since
inception in 1994, President from 1994 through February 1999, Treasurer from
February 1999 through August 1999, and Vice Chairman of the Board since February
1999 of CNL American Properties Fund, Inc., a public, unlisted real estate
investment trust.  He also served in the following positions for CNL Fund
Advisors, Inc., the advisor to CNL American Properties Fund, Inc. prior to its
merger with CNL American Properties Fund, Inc.: director from 1994 through
August 1999, Treasurer from July 1998 through August 1999, President from 1994
through September 1997, and Vice Chairman of the Board from September 1997
through August 1999.  Mr. Bourne is a director and President of CNL Health Care
Properties, Inc., as well as a director and President of CNL Health Care Corp.,
the advisor to the company.  He is also a director, Vice Chairman of the Board
and President of CNL Hospitality Properties, Inc., a public, unlisted real
estate investment trust, as well as CNL Hospitality Corp., its advisor.  Mr.
Bourne also serves as a director of CNLBank.  He has served as a director since
1992, Vice Chairman of the Board since February 1996, Secretary and Treasurer
from February 1996 through 1997, and President from July 1992 through February
1996, of Commercial Net Lease Realty Inc., a public real estate investment trust
listed on the New York Stock Exchange. Mr. Bourne holds the following positions
for these affiliates of CNL Financial

                                       35
<PAGE>

Group, Inc.: director, President and Treasurer of CNL Investment Company;
director, President, Treasurer, and Registered Principal of CNL Securities
Corp., a subsidiary of CNL Investment Company and director, President,
Treasurer, and Chief Investment Officer of CNL Institutional Advisors, Inc., a
registered investment advisor for pension plans. Mr. Bourne began his career as
a certified public accountant employed by Coopers & Lybrand, Certified Public
Accountants, from 1971 through 1978, where he attained the position of tax
manager in 1975. Mr. Bourne graduated from Florida State University in 1970
where he received a B.A. in Accounting, with honors.

     CNL Realty Corporation is a corporation organized on November 26, 1985,
under the laws of the State of Florida.  Its sole directors and shareholders are
James M. Seneff, Jr. and Robert A. Bourne, the individual General Partners.  CNL
Realty Corporation was organized to serve as the corporate general partner of
real estate limited partnerships, such as the Partnership, organized by one or
both of the individual General Partners.  CNL Realty Corporation currently
serves as the corporate general partner of the CNL Income Fund Partnerships.

     CNL Fund Advisors, Inc. provides certain management services in connection
with the Partnership and its Properties.  CNL Fund Advisors, Inc. is a
corporation organized in 1994 under the laws of the State of Florida, and its
principal office is located at 450 South Orange Avenue, Orlando, Florida 32801.
CNL Fund Advisors, Inc. was a majority owned subsidiary of CNL Financial Group,
Inc., until its merger effective September 1, 1999.  On September 1, 1999, CNL
American Properties Fund, Inc. acquired CNL Fund Advisors, Inc. and was
organized to perform property acquisition, property management and other
services.

     CNL Financial Group, Inc., which was the parent company of CNL Fund
Advisors, Inc. through August 1999, was organized in 1980 under the laws of the
State of Florida.  CNL Financial Group, Inc. is a diversified real estate
company which provides a wide range of real estate, development and financial
services to companies in the United States through the activities of its
subsidiaries.  These activities are primarily focused on the franchised
restaurant and hospitality industries.  James M. Seneff, Jr., an individual
General Partner of the Partnership, is the Chairman of the Board, Chief
Executive Officer, and a director of CNL Financial Group, Inc.  Mr. Seneff and
his wife own all of the outstanding shares of CNL Holdings, Inc., the Parent
company of CNL Financial Group, Inc.

     The following persons serve as operating officers of CNL Financial Group,
Inc. or its affiliates or subsidiaries in the discretion of the Boards of
Directors of those companies, but, except as specifically indicated, do not
serve as members of the Boards of Directors of those entities.  The Boards of
Directors have the responsibility for creating and implementing the policies of
CNL Financial Group, Inc. and its affiliated companies.

     Curtis B. McWilliams, age 44, joined CNL Financial Group, Inc. in April
1997 and served as an Executive Vice President through August 1999.  He serves
as Chief Executive Officer of CNL American Properties Fund, Inc. and CNL Fund
Advisors, Inc.  In addition, Mr. McWilliams served as President of CNL Fund
Advisors, Inc. and as President of the Restaurant and Financial Services Groups
within CNL Financial Group, Inc. through August 1999.  Mr. McWilliams served as
President of CNL American Properties Fund, Inc. from February 1999 through
August 1999 and previously served as Executive Vice President from February 1998
through February 1999.  From September 1983 through March 1997, Mr. McWilliams
was employed by Merrill Lynch & Co., most recently as Chairman of Merrill
Lynch's Private Advisory Services until March 1997.  Mr. McWilliams received a
B.S.E. in Chemical Engineering from Princeton University in 1977 and a Masters
of Business Administration with a concentration in finance from the University
of Chicago in 1983.

     John T. Walker, age 41, serves as President and Chief Operating Officer of
CNL American Properties Fund, Inc. and CNL Fund Advisors, Inc..  He served as
Executive Vice President of CNL American Properties Fund, Inc. from January 1996
through August 1999, as Chief Operating Officer since March 1995 through August
1999, and previously served as Senior Vice President from December 1994 through
August 1999.  In addition, Mr. Walker has served as Executive Vice President of
CNL Fund Advisors, Inc. since January 1996 through August 1999, Chief Operating
Officer from April 1995 through August 1999, and previously served as Senior
Vice President from November 1994 through January 1996.  In addition, Mr. Walker
previously served as Executive Vice President of CNL Hospitality Properties,
Inc. and CNL Hospitality Advisors, Inc.  As of September 1, 1999, Mr. Walker
serves as President for CNL American Properties Fund, Inc.  From May 1992 to May
1994, Mr. Walker, a certified public accountant, was Executive Vice President
for Finance and Administration and Chief Financial Officer of Z Music, Inc., a
cable television network (subsequently acquired by Gaylord Entertainment), where
he was responsible for overall financial and administrative management and
planning.  From January 1990 through April 1992, Mr. Walker was Chief Financial
Officer of the First Baptist Church in Orlando, Florida.  From April 1984
through December 1989, he was a partner in the accounting firm of Chastang,
Ferrell & Walker, P.A., where he was the partner in charge of audit and
consulting services, and from 1981 to 1984, Mr. Walker was a Senior

                                       36
<PAGE>

Consultant/Audit Senior at Price Waterhouse.  Mr. Walker is a Cum Laude graduate
of Wake Forest University with a B.S. in Accountancy and is a certified public
accountant.

     Lynn E. Rose, age 51,  Ms. Rose served as Secretary of CNL American
Properties Fund, Inc., a public, unlisted real estate investment trust, from
1994 through August 1999, and served as Treasurer from 1994 through February
1999.  She also served as Treasurer of CNL Fund Advisors, Inc., from 1994
through July 1998, and served as Secretary and a director from 1994 through
August 1999, at which point it merged with CNL American Properties Fund, Inc.
In addition, she is Secretary and Treasurer of CNL Health Care Properties, Inc.,
and serves as Secretary of its subsidiaries.  In addition, she serves as
Secretary, Treasurer and a director of CNL Health Care Corp., the advisor. to
the company.  Ms. Rose also serves as Secretary and Treasurer of CNL Hospitality
Properties, Inc., a public, unlisted real estate investment trust, as Secretary,
Treasurer and a director of CNL Hospitality Corp., its Advisor, and as Secretary
of the subsidiaries of the company.  Ms. Rose served as Secretary and Treasurer
of Commercial Net Lease Realty, Inc., a public real estate investment trust
listed on the New York Stock Exchange, from 1992 to February 1996, and as
Secretary and a director of CNL Realty Advisors, Inc., its advisor, from its
inception in 1991 through 1997.  She also served as Treasurer of CNL Realty
Advisors, Inc. from 1991 through February 1996.  Ms. Rose, a certified public
accountant, has served as Secretary of CNL Financial Group, Inc. (formerly CNL
Group, Inc.) since 1987, served as Controller from 1987 to 1993 and has served
as Chief Financial Officer since 1993.  She also serves as Secretary of the
subsidiaries of CNL Financial Group, Inc. and holds various other offices in the
subsidiaries.  In addition, she serves as Secretary for approximately 50
additional corporations affiliated with CNL Financial Group, Inc. and its
subsidiaries.  Ms. Rose oversees the tax and legal compliance for over 375
corporations, partnerships and joint ventures, and the accounting and financial
reporting for over 200 entities.  Prior to joining CNL, Ms. Rose was a partner
with Robert A. Bourne in the accounting firm of Bourne & Rose, P.A., Certified
Public Accountants.  Ms. Rose holds a B.A. in Sociology from the University of
Central Florida.  She was licensed as a certified public accountant in 1979.

     Jeanne A. Wall, age 41,  Ms. Wall served as Executive Vice President of CNL
American Properties Fund, Inc., a public, unlisted real estate investment trust,
from 1994 through August 1999, and as Executive Vice President of CNL Fund
Advisors, Inc., its advisor, from 1994 through August 1999, at which point it
merged with CNL American Properties Fund, Inc.  Ms. Wall also serves as
Executive Vice President of CNL Health Care Properties, Inc. and CNL Health Care
Corp., the Advisor to the Company.  Ms. Wall also serves as Executive Vice
President of CNL Hospitality Properties, Inc., a public, unlisted real estate
investment trust, and serves as Executive Vice President and a director of CNL
Hospitality Corp., its advisor. She also serves as a director for CNLBank.  Ms.
Wall serves as Executive Vice President of CNL Financial Group, Inc. (formerly
CNL Group, Inc.).  Ms. Wall has served as Chief Operating Officer of CNL
Investment Company and of CNL Securities Corp. since 1994 and has served as
Executive Vice President of CNL Investment Company since January 1991.  In 1984,
Ms. Wall joined CNL Securities Corp. and in 1985, became Vice President.  In
1987, she became a Senior Vice President and in July 1997, became Executive Vice
President of CNL Securities Corp.  In this capacity, Ms. Wall serves as national
marketing and sales director and oversees the national marketing plan for the
CNL investment programs.  In addition, Ms. Wall oversees product development,
communications and investor services for programs offered through participating
brokers.  Ms. Wall also served as Senior Vice President of CNL Institutional
Advisors Inc., a registered investment advisor, from 1990 to 1993.  Ms. Wall
served as Vice President of Commercial Net Lease Realty, Inc., a public real
estate investment trust listed on the New York Stock Exchange, from 1992 through
1997, and served as Vice President of CNL Realty Advisors, Inc. from its
inception in 1991 through 1997. Ms. Wall currently serves as a trustee on the
Board of the Investment Program Association, is a member of the Corporate
Advisory Council for the International Association for Financial Planning and is
a member of IWF, International Women's Forum.  In addition, she previously
served on the Direct Participation Program committee for the National
Association of Securities Dealers, Inc.  Ms. Wall holds a B.A. in Business
Administration from Linfield College and is a registered principal of CNL
Securities Corp.

     Steven D. Shackelford, age 36, a certified public accountant, serves as
Senior Vice President, Chief Financial Officer, and Secretary of CNL American
Properties Fund, Inc. and CNL Fund Advisors, Inc.  He served as Chief Financial
Officer of CNL American Properties Fund, Inc. from January 1997 and as Chief
Financial Officer of CNL Fund Advisors, Inc. since September 1996 through August
1999.  From March 1995 to July 1996, Mr. Shackelford was a senior manager in the
national office of Price Waterhouse where he was responsible for advising
foreign clients seeking to raise capital and a public listing in the United
States.  From August 1992 to March 1995, he served as a manager in the Price
Waterhouse, Paris, France office serving several multinational clients.  Mr.
Shackelford was an audit staff and audit senior from 1986 to 1992 in the
Orlando, Florida office of Price Waterhouse.  Mr. Shackelford received a B.A. in
Accounting, with honors, and a Masters of Business Administration from Florida
State University.

                                       37
<PAGE>

Item 11.  Executive Compensation

     Other than as described in Item 13, the Partnership has not paid and does
not intend to pay any executive compensation to the General Partners or any of
their affiliates.  There are no compensatory plans or arrangements regarding
termination of employment or change of control.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

     As of March 15, 2000, no person was known to the Registrant to be a
beneficial owner of more than five percent of the Units.

     The following table sets forth, as of March 15, 2000, the beneficial
ownership interests of the General Partners in the Registrant.

<TABLE>
<CAPTION>
             Title of Class                                 Name of Partner                          Percent of Class
             --------------                                 ---------------                          ----------------
     <S>                                               <C>                                          <C>
     General Partnership Interests                     James M. Seneff, Jr.                                45%
                                                       Robert A. Bourne                                    45%
                                                       CNL Realty Corporation                              10%
                                                                                                        -------
                                                                                                          100%
                                                                                                        =======
</TABLE>

     Neither the General Partners, nor any of their affiliates, owns any
interest in the Registrant, except as noted above.


Item 13.  Certain Relationships and Related Transactions

     The table below summarizes the types, recipients, methods of computation
and amounts of compensation, fees and distributions paid or payable by the
Partnership to the General Partners and their affiliates for the year ended
December 31, 1999, exclusive of any distributions to which the General Partners
or their affiliates may be entitled by reason of their purchase and ownership of
Units.

<TABLE>
<CAPTION>
                                                                                             Amount Incurred
      Type of Compensation                                                                    For the Year
         and Recipient                         Method of Computation                     Ended December 31, 1999
--------------------------------      --------------------------------------        -------------------------------
<S>                                    <C>                                           <C>
Reimbursement to affiliates for        Operating expenses are reimbursed at          Operating expenses incurred on
 operating expenses                    the lower of cost or 90 percent of            behalf of the Partnership:
                                       the prevailing rate at which                  $157,819
                                       comparable services could have been
                                       obtained in the same geographic area.         Accounting and administra-
                                       Affiliates of the General Partners            tive services:  $118,104
                                       from time to time incur certain
                                       operating expenses on behalf of the
                                       Partnership for which the Partnership
                                       reimburses the affiliates without
                                       interest.
 </TABLE>

                                       38
<PAGE>

<TABLE>
<CAPTION>

                                                                                             Amount Incurred
     Type of Compensation                                                                     For the Year
         and Recipient                         Method of Computation                     Ended December 31, 1999
------------------------------        ---------------------------------------       -------------------------------
<S>                                   <C>                                           <C>
Annual, subordinated manage-           One percent of the sum of gross                $-0-
ment fee to affiliates                 revenues (excluding noncash and lease
                                       accounting adjustments) from
                                       Properties wholly owned by the
                                       Partnership plus the Partnership's
                                       allocable share of gross revenues of
                                       joint ventures in which the
                                       Partnership is a co-venturer,
                                       subordinated to certain minimum
                                       returns to the Limited Partners.  The
                                       management fee, will not exceed
                                       competitive fees for comparable
                                       services.  Due to the fact that these
                                       are noncumulative, if the Limited
                                       Partners have not received their 10%
                                       Preferred Return in any particular
                                       years no management fees will be due
                                       or payable for such year.


Deferred, subordinated real            A deferred, subordinated real estate           $-0-
 estate disposition fee                disposition fee, payable upon sale of
 payable to affiliates                 one or more Properties, in an amount
                                       equal to the lesser of (i) one-half
                                       of a competitive real estate
                                       commission, or (ii) three percent of
                                       the sales price of such Property or
                                       Properties.  Payment of such fee
                                       shall be made only if affiliates of
                                       the General Partners provide a
                                       substantial amount of services in
                                       connection with the sale of a
                                       Property or Properties and shall be
                                       subordinated to certain minimum
                                       returns to the Limited Partners.
                                       However, if the net sales are
                                       reinvested in a replacement Property,
                                       no such real estate disposition fee
                                       will be incurred until such
                                       replacement Property is sold and the
                                       net sales proceeds are distributed.

General Partners' deferred,            A deferred, subordinated share equal           $-0-
 subordinated share of                 to one percent of Partnership
 Partnership net cash flow             distributions of net cash flow,
                                       subordinated to certain minimum
                                       returns to the Limited Partners.

General Partners' deferred,            A deferred, subordinated share equal           $-0-
 subordinated share of                 to five percent of Partnership
 Partnership net sales                 distributions of such net sales
 proceeds from a sale or sales         proceeds, subordinated to certain
 not in liquidation of the             minimum returns to the Limited
 Partnership                           Partners.
</TABLE>

                                       39
<PAGE>

<TABLE>
<CAPTION>
                                                                                             Amount Incurred
     Type of Compensation                                                                     For the Year
         and Recipient                         Method of Computation                     Ended December 31, 1999
------------------------------        ---------------------------------------       -------------------------------
<S>                                   <C>                                           <C>
General Partners' share of             Distributions of net sales proceeds            $-0-
 Partnership net sales                 from a sale or sales of substantially
 proceeds from a sale or sales         all of the Partnership's assets will
 in liquidation of the                 be distributed in the following order
 Partnership                           or priority:  (i) first, to pay all
                                       debts and liabilities of the
                                       Partnership and to establish
                                       reserves; (ii) second, to Partners
                                       with positive capital account
                                       balances, determined after the
                                       allocation of net income, net loss,
                                       gain and loss, in proportion to such
                                       balances, up to amounts sufficient to
                                       reduce such balances to zero; and
                                       (iii) thereafter, 95% to the Limited
                                       Partners and 5% to the General
                                       Partners.
</TABLE>

                                       40
<PAGE>

                                    PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  The following documents are filed as part of this report.

     1.   Financial Statements

               Report of Independent Certified Public Accountants

               Balance Sheets at December 31, 1999 and 1998

               Statements of Income for the years ended December 31, 1999, 1998,
               and 1997

               Statements of Partners' Capital for the years ended December 31,
               1999, 1998, and 1997

               Statements of Cash Flows for the years ended December 31, 1999,
               1998, and 1997

               Notes to Financial Statements

     2.   Financial Statement Schedules

               Schedule III - Real Estate and Accumulated Depreciation at
               December 31, 1999

               Notes to Schedule III - Real Estate and Accumulated Depreciation
               at December 31, 1999

               Schedule IV - Mortgage Loans on Real Estate at December 31, 1999

               All other Schedules are omitted as the required information is
               inapplicable or is presented in the financial statements or notes
               thereto.

     3.  Exhibits

               3.1  Affidavit and Certificate of Limited Partnership of CNL
                    Income Fund VIII, Ltd. (Included as Exhibit 3.2 to
                    Registration Statement No. 33-31482 on Form S-11 and
                    incorporated herein by reference.)

               4.1  Affidavit and Certificate of Limited Partnership of CNL
                    Income Fund VIII, Ltd. (Included as Exhibit 3.2 to
                    Registration Statement No. 33-31482 on Form S-11 and
                    incorporated herein by reference.)

               4.2  Amended and Restated Agreement of Limited Partnership of CNL
                    Income Fund VIII, Ltd. (Included as Exhibit 4.2 to Form 10-K
                    filed with the Securities and Exchange Commission on April
                    1, 1996, and incorporated herein by reference.)

               10.1 Management Agreement between CNL Income Fund VIII, Ltd. and
                    CNL Investment Company (Included as Exhibit 10.1 to Form 10-
                    K filed with the Securities and Exchange Commission on April
                    1, 1996, and incorporated herein by reference.)

               10.2 Assignment of Management Agreement from CNL Investment
                    Company to CNL Income Fund Advisors, Inc. (Included as
                    Exhibit 10.2 to Form 10-K filed with the Securities and
                    Exchange Commission on March 30, 1995, and incorporated
                    herein by reference.)

                                       41
<PAGE>

               10.3 Assignment of Management Agreement from CNL Income Fund
                    Advisors, Inc. to CNL Fund Advisors, Inc. (Included as
                    Exhibit 10.3 to Form 10-K filed with the Securities and
                    Exchange Commission on April 1, 1996, and incorporated
                    herein by reference.)

               27   Financial Data Schedule (Filed herewith.)

(b)  The Registrant filed no reports on Form 8-K during the period October 1,
     1999 through December 31, 1999.

                                       42
<PAGE>

                                  SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 23rd day of
March, 2000.

                                         CNL INCOME FUND VIII, LTD.

                                         By:  CNL REALTY CORPORATION
                                              General Partner

                                              /s/ Robert A. Bourne
                                              ------------------------------
                                              ROBERT A. BOURNE, President


                                         By:  ROBERT A. BOURNE
                                              General Partner

                                              /s/ Robert A. Bourne
                                              ------------------------------
                                              ROBERT A. BOURNE


                                         By:  JAMES M. SENEFF, JR.
                                              General Partner

                                              /s/ James M. Seneff, Jr.
                                              ------------------------------
                                              JAMES M. SENEFF, JR.
<PAGE>

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
             Signature                                 Title                                   Date
             ----------                                ------                                  ----
<S>                                      <C>                                             <C>
/s/ Robert A. Bourne                     President, Treasurer and Director               March 23, 2000
------------------------------------
Robert A. Bourne                         (Principal Financial and Accounting
                                                      Officer)

/s/ James M. Seneff, Jr.                 Chief Executive Officer and Director            March 23, 2000
------------------------------------
James M. Seneff, Jr.                     (Principal Executive Officer)
</TABLE>
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)
            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
            -------------------------------------------------------
                               December 31, 1999

<TABLE>
<CAPTION>
                                                                          Costs Capitalized
                                                                             Subsequent To             Gross Amount at Which
                                                    Initial Cost              Acquisition         Carried at Close of Period (c)
                                               -----------------------   -------------------   ------------------------------------
                                    Encum-               Buildings and   Improve-   Carrying             Buildings and
                                    brances      Land    Improvements      ments     Costs       Land    Improvements        Total
                                    -------    --------  -------------   --------   --------   --------  -------------      -------
<S>                                 <C>        <C>       <C>             <C>        <C>        <C>       <C>            <C>
Properties the Partnership
 has Invested in Under
 Operating Leases:

   Burger King Restaurants:
     Brandon, Florida                  -       $478,467       $      - $        -     $    -   $478,467             (f) $   478,467
     New City, New York                -        372,977              -    557,832          -    372,977        557,832      930,809
     Mansfield, Ohio                   -        377,395              -    496,524          -    377,395        496,524      873,919
     Syracuse, New York                -        363,431              -    485,920          -    363,431        485,920      849,351
     New Philadelphia, Ohio            -        310,920              -    523,967          -    310,920        523,967      834,887
     Baseball City, Florida (g)        -        394,813              -          -          -    394,813             (f)     394,813

   Denny's Restaurant:
     Tiffin, Ohio                      -        143,592        335,971          -          -    143,592        335,971      479,563

   Golden Corral Family
     Steakhouse Restaurants:
       College Station, Texas          -        517,623              -    877,505          -    517,623        877,505    1,395,128
       Houston, Texas                  -        663,999              -  1,129,910          -    663,999      1,129,910    1,793,909
       Beaumont, Texas                 -        552,646              -    893,054          -    552,646        893,054    1,445,700
       Grand Prairie, Texas            -        681,824              -    914,235          -    681,824        914,235    1,596,059

   Hardee's Restaurant:
     Jefferson, Ohio                   -        150,587              -          -          -    150,587             (f)     150,587

   Jack in the Box Restaurants:
     Waco, Texas                       -        412,942              -          -          -    412,942             (f)     412,942
     Mesa, Arizona                     -        609,921              -          -          -    609,921             (f)     609,921

   KFC Restaurant:
     Norton Shores, Michigan           -        177,897              -          -          -    177,897             (f)     177,897

   Perkins Restaurant:
     Memphis, Tennessee                -        431,065              -          -          -    431,065             (f)     431,065

   Popeyes Famous Fried
     Chicken Restaurant:
       Jacksonville, Florida           -        103,063        114,507    149,978          -    103,063        264,485      367,548

<CAPTION>
                                                                                        Life on Which
                                                                                       Depreciation in
                                                              Date                      Latest Income
                                          Accumulated        of Con-       Date          Statement is
                                          Depreciation      struction    Acquired          Computed
                                         --------------     ---------    --------      ---------------
Properties the Partnership
 has Invested in Under
 Operating Leases:

   Burger King Restaurants:
     Brandon, Florida                          $      -        1991        10/90             (d)
     New City, New York                          34,921        1977        03/91             (i)
     Mansfield, Ohio                             31,083        1989        03/91             (i)
     Syracuse, New York                          30,419        1987        03/91             (i)
     New Philadelphia, Ohio                      32,801        1989        03/91             (i)
     Baseball City, Florida (g)                       -        1991        02/91             (d)

   Denny's Restaurant:
     Tiffin, Ohio                                74,057        1990        03/91             (h)

   Golden Corral Family
     Steakhouse Restaurants:
       College Station, Texas                   272,067        1990        09/90             (b)
       Houston, Texas                           339,385        1990        10/90             (b)
       Beaumont, Texas                          285,125        1990        11/90             (b)
       Grand Prairie, Texas                     282,703        1990        11/90             (b)

   Hardee's Restaurant:
     Jefferson, Ohio                                  -        1990        11/90             (d)

   Jack in the Box Restaurants:
     Waco, Texas                                      -        1991        11/90             (d)
     Mesa, Arizona                                    -        1991        02/92             (d)

   KFC Restaurant:
     Norton Shores, Michigan                          -        1990        03/91             (d)

   Perkins Restaurant:
     Memphis, Tennessee                               -        1990        11/90             (d)

   Popeyes Famous Fried
     Chicken Restaurant:
       Jacksonville, Florida                     79,306        1979        09/90             (b)
</TABLE>

                                      F-1
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)
            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
            -------------------------------------------------------
                               December 31, 1999

<TABLE>
<CAPTION>
                                                                        Costs Capitalized
                                                                           Subsequent To               Gross Amount at Which
                                                   Initial Cost             Acquisition           Carried at Close of Period (c)
                                            -------------------------  --------------------  ---------------------------------------
                                   Encum-               Buildings and   Improve-   Carrying              Buildings and
                                   brances     Land     Improvements      ments     Costs       Land     Improvements         Total
                                   -------  ----------  -------------  ----------  --------  ----------  -------------       -------
<S>                                <C>      <C>         <C>             <C>        <C>       <C>         <C>             <C>
 Quincy's Family Steakhouse
    Restaurant:
      Statesville, North Carolina     -        257,225              -           -         -     257,225              (f)     257,225

 Shoney's Restaurants:
    Sun City, Florida                 -        382,883              -     736,865         -     382,883         736,865    1,119,748
    Brooksville, Florida              -        225,067              -           -         -     225,067              (f)     225,067
    Bayonet Point, Florida            -        418,464              -           -         -     418,464              (f)     418,464
    Memphis, Tennessee                -        368,290        601,660           -         -     368,290         601,660      969,950
    North Fort Myers, Florida         -        398,423              -           -         -     398,423              (f)     398,423

 Wendy's Old Fashioned
    Hamburger Restaurant:
      Midlothian, Virginia            -        365,601              -     477,745         -     365,601        477,745       843,346
                                            ----------     ----------  ----------  --------  ----------     ----------   -----------

                                            $9,159,115     $1,052,138  $7,243,535  $      -  $9,159,115     $8,295,673   $17,454,788
                                            ==========     ==========  ==========  ========  ==========     ==========   ===========
Property of Joint Venture in Which
    the Partnership has an 85.54%
    Interest and has Invested in
    Under an Operating Lease:

    Burger King Restaurant:
    Asheville, North Carolina         -     $  438,695     $  450,432  $        -  $      -  $  438,695     $  450,432   $   889,127
                                            ==========     ==========  ==========  ========  ==========     ==========   ===========

Properties of Joint Venture in
    which the Partnership has a
    36.8% Interest and has
    Invested in Under an
    Operating Leases:

    Burger King Restaurants:
    Columbus, Ohio                    -     $  345,696     $  651,985  $        -  $      -  $  345,696     $  651,985   $   997,681
    San Antonio, Texas                -        350,479        623,615           -         -     350,479        623,615       974,094
    Pontiac, Michigan                 -        277,192        982,200           -         -     277,192        982,200     1,259,392
    Raceland, Louisiana               -        174,019        986,879           -         -     174,019        986,879     1,160,898
    New Castle, Indiana               -        264,239        662,265           -         -     264,239        662,265       926,504
    Hastings, Minnesota               -        155,553        657,159           -         -     155,553        657,159       812,712
                                            ----------     ----------  ----------  --------  ----------     ----------   -----------

                                            $1,567,178     $4,564,103  $        -  $      -  $1,567,178     $4,564,103   $ 6,131,281
                                            ==========     ==========  ==========  ========  ==========     ==========   ===========

<CAPTION>
                                                                                        Life on Which
                                                                                       Depreciation in
                                                              Date                      Latest Income
                                          Accumulated        of Con-       Date          Statement is
                                          Depreciation      struction    Acquired          Computed
                                         --------------     ---------    --------      ---------------
<S>                                      <C>                <C>          <C>           <C>
 Quincy's Family Steakhouse
    Restaurant:
      Statesville, North Carolina                     -       1991          10/91             (d)

 Shoney's Restaurants:
    Sun City, Florida                           216,887       1991          10/90             (b)
    Brooksville, Florida                              -       1991          12/90             (d)
    Bayonet Point, Florida                            -       1989          06/91             (d)
    Memphis, Tennessee                          168,245       1991          08/91             (b)
    North Fort Myers, Florida                         -       1991          09/95             (d)

 Wendy's Old Fashioned
    Hamburger Restaurant:
      Midlothian, Virginia                      138,699       1991          03/91             (b)
                                             ----------

                                             $1,985,698
                                             ==========
Property of Joint Venture in Which
   the Partnership has an 85.54%
   Interest and has Invested in
   Under an Operating Lease:

     Burger King Restaurant:
      Asheville, North Carolina              $  131,962       1986          03/91             (b)
                                             ==========

Properties of Joint Venture in
   which the Partnership has a
   36.8% Interest and has
   Invested in Under an
   Operating Leases:

     Burger King Restaurants:
      Columbus, Ohio                         $  179,579       1986          09/91             (b)
      San Antonio, Texas                        171,765       1986          09/91             (b)
      Pontiac, Michigan                         270,531       1987          09/91             (b)
      Raceland, Louisiana                       271,820       1988          09/91             (b)
      New Castle, Indiana                       182,410       1988          09/91             (b)
      Hastings, Minnesota                       181,004       1990          09/91             (b)
                                             ----------

                                             $1,257,109
                                             ==========
</TABLE>

                                      F-2
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)
            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
            -------------------------------------------------------
                               December 31, 1999

<TABLE>
<CAPTION>
                                                                             Costs Capitalized
                                                                               Subsequent To           Gross Amount at Which
                                                       Initial Cost             Acquisition        Carried at Close of Period (c)
                                                 ---------  --------------  -------------------   ---------------------------------
                                      Encum-                 Buildings and  Improve-   Carrying             Buildings and
                                      brances      Land      Improvements    ments       Costs     Land     Improvements     Total
                                      --------   --------   --------------  ---------  --------   --------  -------------  --------
<S>                                   <C>        <C>        <C>             <C>        <C>        <C>       <C>            <C>
Property of Joint Venture in Which
  the Partnership has a 12.46%
  Interest and has Invested in
  Under an Operating Lease:

    Golden Corral Family
      Steakhouse Restaurant:
        Middleburg Heights, Ohio        -        $521,571   $        -    $        -    $   -     $521,571          (f)  $  521,571
                                                 ========   ==========    ==========    ======    ========               ==========

Property of Joint Venture in Which
  the Partnership has a 34%
  Interest and has Invested in
  Under an Operating Lease:

    IHOP Restaurant
      Bossier City, Los Angeles                  $453,016   $  866,192    $        -    $   -     $453,016    $866,192   $1,319,208
                                                 ========   ==========    ==========    ======    ========    ========   ==========

Properties the Partnership has
  Invested in Under Direct
  Financing Leases:

    Burger King Restaurants:
      Brandon, Florida                  -        $      -            -    $  483,107    $   -     $      -          (f)          (f)
      Baseball City, Florida (g)        -               -            -       551,446        -            -          (f)          (f)

    Hardee's  Restaurants:
      Brunswick, Ohio                   -         116,199      457,907             -        -           (f)         (f)          (f)
      Grafton, Ohio                     -          66,092      411,798             -        -           (f)         (f)          (f)
      Jefferson, Ohio                   -               -      443,444             -        -            -          (f)          (f)
      Lexington, Ohio                   -         124,707      433,264             -        -           (f)         (f)          (f)

    Jack in the Box Restaurants:
      Waco, Texas                       -               -            -       406,745        -            -          (f)          (f)
      Mesa, Arizona                     -               -      561,477             -        -            -          (f)          (f)

    KFC Restaurants:
      Grand Rapids, Michigan            -         169,175      620,623             -        -           (f)         (f)          (f)
      Norton Shores, Michigan           -               -      509,228             -        -            -          (f)          (f)

    Perkins Restaurant:
      Memphis, Tennessee                -               -            -       594,154        -            -          (f)          (f)


<CAPTION>
                                                                                                              Life on Which
                                                                                                             Depreciation in
                                                                          Date                                Latest Income
                                                      Accumulated        of Con-            Date               Statement is
                                                      Depreciation       struction        Acquired               Computed
                                                     --------------    ------------    -------------        -----------------
<S>                                                  <C>               <C>             <C>                  <C>
Property of Joint Venture in Which
  the Partnership has a 12.46%
  Interest and has Invested in
  Under an Operating Lease:

    Golden Corral Family
      Steakhouse Restaurant:
        Middleburg Heights, Ohio                       $       -           1995          05/96                    (d)
                                                       =========

Property of Joint Venture in Which
  the Partnership has a 34%
  Interest and has Invested in
  Under an Operating Lease:

    IHOP Restaurant
      Bossier City, Los Angeles                        $   4,542           1998          11/99                    (b)
                                                       =========

Properties the Partnership has
  Invested in Under Direct
  Financing Leases:

    Burger King Restaurants:
      Brandon, Florida                                        (d)          1991          10/90                    (d)
      Baseball City, Florida (g)                              (d)          1991          02/91                    (d)

    Hardee's  Restaurants:
      Brunswick, Ohio                                         (e)          1990          11/90                    (e)
      Grafton, Ohio                                           (e)          1990          11/90                    (e)
      Jefferson, Ohio                                         (d)          1990          11/90                    (d)
      Lexington, Ohio                                         (e)          1990          11/90                    (e)

    Jack in the Box Restaurants:
      Waco, Texas                                             (d)          1991          11/90                    (d)
      Mesa, Arizona                                           (d)          1991          02/92                    (d)

    KFC Restaurants:
      Grand Rapids, Michigan                                  (e)          1990          02/91                    (e)
      Norton Shores, Michigan                                 (d)          1990          03/91                    (d)

    Perkins Restaurant:
      Memphis, Tennessee                                      (d)          1990          11/90                    (d)
</TABLE>



                                      F-3
<PAGE>

                          CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)
            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
            -------------------------------------------------------
                               December 31, 1999

<TABLE>
<CAPTION>
                                                                             Costs Capitalized
                                                                               Subsequent To           Gross Amount at Which
                                                       Initial Cost             Acquisition        Carried at Close of Period (c)
                                                 ---------  --------------  -------------------   ---------------------------------
                                      Encum-                 Buildings and  Improve-   Carrying             Buildings and
                                      brances      Land      Improvements    ments       Costs     Land     Improvements     Total
                                      --------   --------   --------------  ---------  --------   --------  -------------  --------
<S>                                   <C>        <C>        <C>             <C>        <C>        <C>       <C>            <C>
    Quincy's Family  Steakhouse
      Restaurant:
        Statesville,
          North Carolina                -               -      705,444             -        -            -          (f)          (f)

    Shoney's Restaurants:
      Brooksville, Florida              -               -            -       644,369        -            -          (f)          (f)
      Bayonet Point, Florida            -               -      575,985             -        -            -          (f)          (f)
      North Fort Myers, Florida         -               -      552,240             -        -            -          (f)          (f)
                                                 --------   ----------    ------------- --------  --------

                                                 $476,173   $5,271,410    $2,679,821    $   -     $      -
                                                 ========   ===========   ============= ========  ========

Property of Joint Venture in Which
  the Partnership has a 12.46%
  Interest and has Invested in
  Under a Direct Financing Lease:

    Golden Corral Family
      Steakhouse Restaurant:
        Middleburg Heights, Ohio        -        $      -   $1,357,288    $        -    $   -     $      -          (f)          (f)
                                                 ========   ==========    ==========    ========  ========


<CAPTION>
                                                                                                              Life on Which
                                                                                                             Depreciation in
                                                                          Date                                Latest Income
                                                      Accumulated        of Con-            Date               Statement is
                                                      Depreciation       struction        Acquired               Computed
                                                     --------------    ------------    -------------        -----------------
<S>                                                  <C>               <C>             <C>                  <C>
    Quincy's Family  Steakhouse
      Restaurant:
        Statesville,
          North Carolina                                  (d)             1991             10/91                  (d)

    Shoney's Restaurants:
      Brooksville, Florida                                (d)             1991             12/90                  (d)
      Bayonet Point, Florida                              (d)             1989             06/91                  (d)
      North Fort Myers, Florida                           (d)             1991             09/95                  (d)





Property of Joint Venture in Which
  the Partnership has a 12.46%
  Interest and has Invested in
  Under a Direct Financing Lease:

    Golden Corral Family
      Steakhouse Restaurant:
        Middleburg Heights, Ohio                          (d)             1995             05/96                  (d)
</TABLE>

                                      F-4
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
        ----------------------------------------------------------------

                               December 31, 1999


(a)  Transactions in real estate and accumulated depreciation during 1999, 1998,
     and 1997, are summarized as follows:

<TABLE>
<CAPTION>
                                                                                              Accumulated
                                                                          Cost               Depreciation
                                                                      ------------           ------------
<S>                                                                   <C>                    <C>
Properties the Partnership has Invested
in Under Operating Leases:

  Balance, December 31, 1996                                          $ 15,398,766              1,229,563
  Depreciation expense                                                          --                208,971
                                                                      ------------           ------------

  Balance, December 31, 1997                                            15,398,766              1,438,534
  Reclassified to operating lease                                        2,064,243                     --
  Dispositions                                                              (8,221)                    --
  Depreciation expense                                                          --                246,976
                                                                      ------------           ------------

  Balance, December 31, 1998                                            17,454,788              1,685,510
  Depreciation expense                                                          --                300,188
                                                                      ------------           ------------

  Balance, December 31, 1999                                          $ 17,454,788           $  1,985,698
                                                                      ============           ============

Property of Joint Venture in Which the Partnership has an 85.54%
 Interest and has Invested in Under an Operating Lease:

  Balance, December 31, 1996                                          $    889,127           $     86,920
  Depreciation expense                                                          --                 15,014
                                                                      ------------           ------------

  Balance, December 1997                                                   889,127                101,934
  Depreciation expense                                                          --                 15,014
                                                                      ------------           ------------

  Balance, December 31, 1998                                               889,127                116,948
  Depreciation expense                                                                             15,014
                                                                      ------------           ------------

  Balance, December 31, 1999                                          $    889,127           $    131,962
                                                                      ============           ============
</TABLE>

                                      F-5
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

              NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
              ---------------------------------------------------
                            DEPRECIATION - CONTINUED
                            ------------------------

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                                                       Accumulated
                                                                                   Cost               Depreciation
                                                                               ------------           ------------
<S>                                                                            <C>                    <C>
Property of Joint Venture in Which the Partnership has
 36.8% Interest and has Invested in Under Operating
 Leases:

  Balance, December 31, 1996                                                   $  6,131,281           $    800,698
  Depreciation expense                                                                   --                152,137
                                                                               ------------           ------------

  Balance, December 31, 1997                                                      6,131,281                952,835
  Depreciation expense                                                                   --                152,137
                                                                               ------------           ------------

  Balance, December 31, 1998                                                      6,131,281              1,104,972
  Depreciation expense                                                                                     152,137
                                                                               ------------           ------------

  Balance, December 31, 1999                                                   $  6,131,281           $  1,257,109
                                                                               ============           ============

Property of Joint Venture in Which the Partnership has
 a 34% Interest and has Invested in Under an
 Operating Lease

  Balance, December 31, 1998                                                   $         --           $         --
  Acquisition                                                                     1,319,208                     --
  Depreciation expense                                                                   --                  4,542
                                                                               ------------           ------------

  Balance, December 31, 1999                                                   $  1,319,208           $      4,542
                                                                               ============           ============

Property of Joint Venture in Which the Partnership has
 a 12.46% Interest and has Invested in Under an
 Operating Lease:

  Balance, December 31, 1996                                                   $    521,571           $         --
  Depreciation expense (d)                                                               --                     --
                                                                               ------------           ------------

  Balance, December 31, 1997                                                        521,571                     --
  Depreciation expense                                                                   --                     --
                                                                               ------------           ------------

  Balance, December 31, 1998                                                        521,571                     --
  Depreciation expense                                                                   --                     --
                                                                               ------------           ------------

  Balance, December 31, 1999                                                   $    521,571           $         --
                                                                               ============           ============
</TABLE>

(b)  Depreciation expense is computed for buildings and improvements based upon
     estimated lives of 30 years.

                                      F-6
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

              NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
              ---------------------------------------------------
                            DEPRECIATION - CONTINUED
                            ------------------------

                               December 31, 1999

(c)  As of December 31, 1999, the aggregate cost of the Properties owned by the
     Partnership and its consolidated joint venture, and the unconsolidated
     joint ventures for federal income tax purposes was $26,164,478 and
     $10,217,474, respectively.  All of the leases are treated as operating
     leases for federal income tax purposes.

(d)  For financial reporting purposes, the portion of the lease relating to the
     building has been recorded as a direct financing lease.  The cost of the
     building has been included in the net investment in direct financing lease;
     therefore, depreciation is not applicable.

(e)  For financial reporting purposes, the lease for land and building has been
     recorded as a direct financing lease.  The cost of the land and building
     has been included in net investment in direct financing leases; therefore,
     depreciation is not applicable.

(f)  For financial reporting purposes, certain components of the lease relating
     to land and building have been recorded as a direct financing lease.
     Accordingly, costs relating to these components of this lease are not
     shown.

(g)  The restaurant on this Property was converted from a Popeyes Famous Fried
     Chicken Restaurant to a Burger King restaurant in February 1993.

(h)  Effective January 1, 1994, the lease for this Property was amended,
     resulting in the reclassification of the building portion of the lease as
     an operating lease.  The building was recorded at net book value as of
     January 1, 1994, and depreciated over its remaining estimated life of
     approximately 27 years.

(i)  Effective August 1, 1998, the lease for this Property was amended,
     resulting in the reclassification of the building portion of the lease as
     an operating lease.  The building was recorded at net book value as of
     August 1, 1998, and depreciated over its remaining estimated life of
     approximately 23 years.

                                      F-7
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

                  SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                  -------------------------------------------

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                                                                       Principal
                                                                                                                        Amount
                                                                                                                        of Loans
                                                                                                                      Subject to
                                                                                                        Carrying      Delinquent
                                          Final         Periodic                           Face        Amount of      Principal or
                         Interest        Maturity        Payment        Prior           Amount of      Mortgages      Description
                           Rate            Date          Terms          Liens           Mortgages         (1)          Interest
                       ------------   -------------   ----------   -------------   ---------------    -----------    ------------
<S>                    <C>            <C>             <C>          <C>             <C>                <C>            <C>
Church's
Jacksonville, FL
First Mortgage            10.00%      December 2005      (2)       $          --   $       240,000    $   235,713    $         --

Church's                                                                                                                       --
Jacksonville, FL
First Mortgage            10.00%      December 2005      (3)                  --           220,000        216,070              --

Ponderosa
Orlando, FL
First Mortgage            10.75%       October 2011      (4)                  --         1,388,568      1,021,788              --
                                                                   -------------   ---------------    -----------    ------------

                                                                   $          --   $     1,848,568    $ 1,473,571    $         --
                                                                   =============   ===============    ===========    ============
</TABLE>

(1)  The tax carrying value of the notes is $1,460,765.

(2)  Monthly payments of principal and interest at an annual rate of 10%, with a
     balloon payment at maturity of $218,252.

(3)  Monthly payments of principal and interest at an annual rate of 10%, with a
     balloon payment at maturity of $200,324.

(4)  Monthly payments of $12,633 were consisting of principal and interest at an
     annual rate of 10.75%.  During 1999, the Partnership received a prepaid
     principal payment from the borrower that was applied to the unpaid
     principal balance, reflected in the carrying amount of mortgage.

                                      F-8
<PAGE>

                           CNL INCOME FUND VIII, LTD.
                        (A Florida Limited Partnership)

            SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - CONTINUED
            -------------------------------------------------------

                               December 31, 1999


(5)  The changes in the carrying amounts are summarized as follows:


<TABLE>
<CAPTION>
                                                               1999              1998                1997
                                                         --------------     --------------      ---------------
          <S>                                            <C>                <C>                 <C>
          Balance at beginning of
            period                                       $    1,811,726     $    1,853,386      $     1,862,262

          Interest earned                                       162,182            191,738              194,784

          Collection of principal and
            interest                                           (500,337)          (233,398)            (203,660)
                                                         --------------     --------------      ---------------

          Balance at end of period                       $    1,473,571     $    1,811,726      $     1,853,386
                                                         ==============     ==============      ===============
</TABLE>

                                      F-9
<PAGE>

                                 EXHIBIT INDEX

Exhibit Number
--------------

   3.1    Affidavit and Certificate of Limited Partnership of CNL Income Fund
          VIII, Ltd. (Included as Exhibit 3.2 to Registration Statement No. 33-
          31482 on Form S-11 and incorporated herein by reference.)

   4.1    Affidavit and Certificate of Limited Partnership of CNL Income Fund
          VIII, Ltd. (Included as Exhibit 3.2 to Registration Statement No. 33-
          31482 on Form S-11 and incorporated herein by reference.)

   4.2    Amended and Restated Agreement of Limited Partnership of CNL Income
          Fund VIII, Ltd. (Included as Exhibit 4.2 to Form 10-K filed with the
          Securities and Exchange Commission on April 1, 1996, and incorporated
          herein by reference.)

   10.1   Management Agreement between CNL Income Fund VIII, Ltd. and CNL
          Investment Company (Included as Exhibit 10.1 to Form 10-K filed with
          the Securities and Exchange Commission on April 1, 1996, and
          incorporated herein by reference.)

   10.2   Assignment of Management Agreement from CNL Investment Company to CNL
          Income Fund Advisors, Inc. (Included as Exhibit 10.2 to Form 10-K
          filed with the Securities and Exchange Commission on March 30, 1995,
          and incorporated herein by reference.)

   10.3   Assignment of Management Agreement from CNL Income Fund Advisors, Inc.
          to CNL Fund Advisors, Inc. (Included as Exhibit 10.3 to Form 10-K
          filed with the Securities and Exchange Commission on April 1, 1996,
          and incorporated herein by reference.)

   27     Financial Data Schedule (Filed herewith.)

                                       i